State Street Global Advisors (SSgA) has announced that it will no longer use several Ireland-domiciled bond funds for securities lending, a move it says is in the best interests of its shareholders.
The Ireland-domiciled UCITS portfolios that are now closed to lending include: the SSgA World Broad Investment Grade Index; World Government Bond Index; EMU Government Bond Index; UK Government Bond Index; US Corporate Bond Index; US Government Bond Index; Euro Corporate Bond Index; Euro Broad Investment Grade Bond Index; and EMU Government Long Bond II funds.
The move caps two years of problems at State Street’s securities lending business, which was forced to impose redemption fees on funds involved in lending securities in the wake of the Lehman liquidity crisis. In September 2009 the firm was sued by a number of U.S. pension funds for denying access to their assets.
More recently, State Street injected US$330 million into SSgA funds involved in securities lending programs in an effort to shore them up, after which its 8 top executives quit en masse to form a rival securities lending firm.
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