NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the ratings assigned to the following municipal money market funds managed by Wells Fargo Funds Management, LLC (WFFM):
--Wells Fargo Advantage Municipal Cash Management Money Market Fund at 'AAAmmf';
--Wells Fargo Advantage National Tax-Free Money Market Fund at 'AAAmmf'.
KEY RATING DRIVERS
The main drivers for the affirmations are:
--The portfolios' overall credit quality and diversification;
--Low exposure to interest rate and spread risks;
--Short maturity profile with high level of weekly liquid assets, consistent with funds' shareholders profile and concentration;
--The capabilities and resources of WFFM as investment advisor.
As of April 26, 2013, Wells Fargo Advantage Municipal Cash Management Money Market Fund and Wells Fargo Advantage National Tax-Free Money Market Fund had approximately $1.3 billion and $3.1 billion in assets under management, respectively.
PORTFOLIO CREDIT QUALITY/DIVERSIFICATION
Consistent with Fitch's 'AAAmmf' rating criteria, both funds maintain a high credit quality by investing exclusively in securities rated at least 'A/F1' or equivalent.
The Wells Fargo Advantage Municipal Cash Management Fund seeks current income exempt from regular federal income tax, while preserving capital and liquidity. The fund pursues its investment objectives by investing in a portfolio of high quality, short-term municipal obligations, which may have fixed, floating, or variable rates of interest, and typically include variable rate demand notes (VRDNs) putable to a third party financial institution in seven days or less.
The Wells Fargo Advantage National Tax Free Money Market Fund seeks current income exempt from federal income tax, while preserving capital and liquidity. The fund pursues its investment objectives by investing in a portfolio of high quality, short-term municipal obligations, which may have fixed, floating, or variable rates of interest, and typically include VRDNs putable to a third party financial institution in seven days or less. At least 80% of the fund's net assets are invested in municipal obligations that pay interest exempt from federal income tax and federal alternative minimum tax.
Additionally, both funds seek to manage concentration with respect to both direct issuer and VRDN support provider exposure and are in line with Fitch's issuer diversification guidelines.
MATURITY PROFILE
The funds seek to minimize interest rate and spread risks by limiting their weighted average maturities (WAM) and weighted average life (WAL) to 60 days and 120 days, respectively, consistent with Fitch's 'AAAmmf' rating criteria. As of April 26, 2013, Wells Fargo Advantage Municipal Cash Management Money Market Fund had WAM of 20 days and WAL of 20 days, while Wells Fargo Advantage National Tax-Free Money Market Fund had WAM of 19 days and WAL of 19 days.
LIQUIDITY PROFILE
To limit liquidity risk, the funds seek to invest at least 30% of their portfolios in weekly liquid assets, which are typically VRDNs putable to a third party financial institution in seven days or less. As of April 26, 2013, the funds met the 'AAAmmf' liquidity guidelines outlined in Fitch's rating criteria for money market funds.
INVESTMENT ADVISER
WFFM, a wholly owned subsidiary of Wells Fargo & Company (rated 'AA-/F1+', Outlook Stable), manages the fund's investment operations. As of April 30, 2013, WFFM had more than $227 billion in assets. Wells Fargo & Company is headquartered in San Francisco and is the fourth largest bank in the U.S. by assets and deposits.
RATING SENSITIVITY AND SURVEILLANCE
The ratings may be sensitive to material changes in the credit quality or market risk profiles of the fund. A material adverse deviation from Fitch's guidelines for any key rating driver could cause Fitch to downgrade the ratings. For additional information about Fitch's money market fund ratings guidelines, please review the criteria referenced below.
To maintain the fund rating, Fitch seeks weekly portfolio holdings information from the fund administrator and conducts surveillance checks against its ratings guidelines. Surveillance data for this fund is available at www.fitchratings.com/FAM > Surveillance.
Additional information is available at 'www.fitchratings.com'.
The sources of information used to assess this rating were the public domain and WFFM.
Applicable Criteria and Related Research:
--'Global Money Market Fund Rating Criteria', March 26, 2012.
Applicable Criteria and Related Research:
Global Money Market Fund Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=704145
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=792092
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