From the Post:
Putnam Investments has closed a $12.3 billion money-market fund to limit losses to its investors, the large mutual fund company said today. The highly unusual announcement is the latest sign that tremendous financial pressures are now threatening even some of the safest kinds of investments.
The Prime Money Market Fund was open only to institutional investors. Putnam said in a statement that its board decided to close the fund last night after receiving a large number of redemption requests. The company said it could honor those requests only by selling assets at a loss, reducing the value of the remaining shares.
Putnam said it decided instead to liquidate the fund and spread any losses evenly among all the investors. “We wanted to treat all shareholders equally,” said spokeswoman Laura McNamara. She said it was “premature” to discuss how much of a loss, if any, shareholders will incur.