Dec. 20 (Bloomberg) -- SunTrust Banks Inc. injected $1.4 billion into two of its money-market funds, becoming at least the seventh company to rescue customers from losses on an investment traditionally billed as one of the safest.

The bailout keeps the Atlanta-based bank's money funds from falling below the $1-a-share promised to investors. Losses caused by a collapse in global credit markets spurred companies including Bank of America Corp. and Wachovia Corp. to bolster money funds so they don't ``break the buck,'' which can shake confidence and spur withdrawals by clients.

SunTrust's plan to purchase securities that have lost value from its money funds may lead to a $250 million writedown before taxes, the bank said in a regulatory filing today. The bank may also more than double reserves for credit losses to $337 million in the fourth quarter because of falling home prices.

``SunTrust is being extremely conservative,'' said Peter Crane, founder of Crane Data LLC, the publisher of Money Fund Intelligence in Westborough, Massachusetts. The writedown reflects an 18 percent decline in the value of the securities, he said. ``They will recover almost all of it next year.''

SunTrust dropped $2.40, or 3.8 percent, to $61.09 in 4:32 p.m. New York Stock Exchange composite trading. The stock has declined about 28 percent this year. SunTrust said it expects to be profitable in the fourth quarter and maintain its dividend.

SIV Assets

The funds affected are STI Classic Prime Quality, sold to individuals, and STI Classic Institutional Cash Management, marketed to financial institutions and professionals who may offer it to clients. The funds held $14 billion of assets in the third quarter, according to the company's Web site.

The securities being purchased from the money-market funds were issued by structured investment vehicles, or SIVs, which sell short-term debt and invest the proceeds in higher-yielding securities.

Citigroup Inc., Bank of America Corp., JPMorgan Chase & Co. and BlackRock Inc. have formed a ``SuperSIV'' fund to bail out SIVs hurt by the collapse of some credit markets, including those for subprime home mortgages.

The 10 largest managers of U.S. money-market funds held about $50 billion as of November in short-term debt of SIVs, some of which has already defaulted. SEI Investments Co. and Legg Mason Inc. have bailed out money-market funds, while General Electric Co. and Federated Investors Inc. protected investors in ``enhanced cash funds'' from possible losses.

No Obligation

SunTrust said it had no contractual obligation to take on the securities issued by SIVs and the bailout shouldn't be seen as a precedent. Money-market funds, often purchased as an alternative to bank accounts, aren't covered by federal deposit insurance.

``The company does not anticipate similar valuation issues with the funds or remaining securities within the funds,'' the filing said.

Banks and asset managers are rescuing money funds because they want to maintain customer confidence, Crane said.

``Everyone has to be conservative in this environment,'' he said.

Lower real estate values are prompting SunTrust to raise its provision for loan losses during the fourth quarter by $190 million to $337 million, compared with $147 million on Sept. 30.

Fears of further credit losses in 2008 prompted Standard & Poor's Corp. Analyst Frank Braden to cut his expectations for SunTrust's share price to $60 from $68. Braden rates SunTrust ``neutral.'' Two of the 23 analysts following SunTrust rate the bank a ``buy.''

Long Ties

SunTrust also completed its review of its holdings of 43.6 million shares of Atlanta-based Coca-Cola Co., now valued at about $2.7 billion. The bank said it is disclosing its strategy for the stake to regulators ``and other relevant parties.''

SunTrust spokesman Barry Koling declined to name those parties or say when SunTrust will publicly disclose its plans for the Coca-Cola shares.

``They are going to sell a very large chunk of their Coke stock,'' said analyst Jeff Davis of FTN Midwest Research Securities Inc. ``The mistake they made was not selling it in 1997 or 1998 when it was selling for $80 a share. Since then, it's been a wasting asset.''

Capital raised from selling Coca-Cola shares could offset higher credit losses, Davis and Goldman Sachs Group Inc. analyst Lori Appelbaum said.

Ties between the world's largest soft-drink company and the bank date to 1919, when a predecessor bank, Trust Company of Georgia, took stock instead of cash when helping launch Coca- Cola's public offering, Davis said. SunTrust in May sold 4.5 million shares, or 9 percent of its Coca-Cola stake.

The bank keeps a copy of the original formula for Coca-Cola in a vault, while Chief Executive Officer Neville Isdell and former CEO M. Douglas Ivester are SunTrust directors. Coca-Cola fell 57 cents to $62.28 in New York trading.

To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net

Last Updated: December 20, 2007 17:28 EST