Fitch Affirms 2 AllianceBernstein MMFs at 'AAAmmf'
NEW YORK -- October 3, 2013
Fitch Ratings has affirmed the 'AAAmmf' rating of two AllianceBernstein money
market funds (MMF) managed by AllianceBernstein:
-- AllianceBernstein Government Reserves MMF;
-- AllianceBernstein Exchange Reserves.
The rating assignment reflects the fund's extremely strong capacity to achieve
its investment objectives of maximizing current income to the extent
consistent with preservation of capital and the maintenance of liquidity.
KEY RATING DRIVERS
--The fund's overall credit quality and diversification;
--Short maturity profile;
--Minimal exposure to interest rate and spread risk;
--The capabilities and resources of AllianceBernstein as investment advisor.
The 'AAAmmf' ratings reflect the funds' extremely strong capacity to achieve
their investment objectives of preserving principal and providing shareholder
liquidity through limiting credit, market, and liquidity risk.
FUND OBJECTIVES AND STRUCTURE
The funds seek to maximize current income to the extent consistent with
preservation of capital and liquidity and the maintenance of a stable $1.00
per share net asset value. Collectively, the funds had assets under management
of $1.8 billion as of Sept. 19, 2013.
AllianceBernstein Government Reserves MMF invests at least 80%, and normally
substantially all, of its net assets in marketable obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities (which
may bear adjustable rates of interest) (U.S. government securities).
AllianceBernstein Exchange Reserves fund invests in marketable obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, including obligations that are issued by private issuers
that are guaranteed as to principal or interest by the U.S. Government, its
agencies or instrumentalities, CDs and bankers' acceptances, CP, adjustable
rate obligations, asset-backed securities, and repurchase agreements that are
The Prime fund has recently temporarily exceeded the 'AAAmmf' 1.5 threshold
for Fitch's Portfolio Credit Factor (PCF) metric. The PCF is a risk-weighted
measure of the funds' portfolio assets accounting for credit quality and
maturity profile. Fitch's MMF rating criteria allows for temporary deviations,
and therefore the Prime funds are deemed consistent with a 'AAAmmf' rating.
Consistent deviations from Fitch's rating criteria in the future may
negatively impact the ratings.
MARKET RISK AND LIQUIDITY PROFILE
The funds seek to manage their market risk exposures by limiting their
weighted average maturity to reset date (WAM) and weighted average life (WAMf)
to 60 and 120 days, respectively, consistent with Fitch's 'AAAmmf' rating
In line with Fitch's rating criteria, the funds invest at least 10% of their
total assets in securities maturing overnight or other qualifying assets such
as U.S. Treasuries and at least 25% of their total assets in securities
maturing within seven days or other qualified assets. As of September 19,
2013, the funds fully met these liquidity requirements.
AllianceBernstein, L.P., rated 'A+'/'F1'; Stable Outlook, is a global,
diversified asset manager (USD436 billion assets under management as at Aug.
31, 2013), approximately 63% owned by AXA S.A. ('A'/'F1'; Stable Outlook). AB
has been investing in high yield and emerging market debt since the early
1990s. Money market assets under management were $1.92 billion as of Sept. 19,
RATING SENSITIVITY AND SURVEILLANCE
The rating may be sensitive to material changes in the credit quality, market
or liquidity risk profiles of the fund. A material adverse deviation from
Fitch guidelines for any key rating driver could cause the rating to be
lowered by Fitch, including adverse changes in shareholder concentration
and/or increases in unanticipated cash outflows. Given the prime portfolio's
primary investment focus on domestic and foreign issuers in the financial
sector, the ratings may also be sensitive to material adverse changes in the
Fitch expects to receive weekly portfolio holdings information from the fund's
administrator to conduct surveillance against ratings guidelines and maintain
its money market fund rating.
Surveillance and analytical information on this fund is expected to be
available in the Funds Surveillance section of Fitch's web site
('www.fitchratings.com') in the near future.
Additional information is available at 'www.fitchratings.com'.
The sources of information used to assess this rating were the public domain
Applicable Criteria and Related Research:
--'Global Money Market Fund Rating Criteria' (March 2013);
--'End-June MMF Snapshot Reflects Uncertain Outlook' (July 2013);
--'U.S. Money Market Funds Dashboard' (August 2013).
Applicable Criteria and Related Research:
U.S. Money Market Funds Dashboard
Global Money Market Fund Rating Criteria
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ON THE FITCH WEBSITE.
Gwen Fink-Stone, J.D., +1-212-908-9128
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
Yuriy Layvand, CFA, +1-212-908-9191
Ian Rasmussen, +1-212-908-0232
Sandro Scenga, New York, +1-212-908-0278
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