BofA Again Covers Losses
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BankAmerica Corp. said Thursday that it had pumped an additional $50.5 million into two money market funds it sponsors to cover losses the funds incurred in selling off securities.
Those securities are believed to be exotic “derivative” investments, although the bank did not specify them as such.
The capital infusion into the $680-million Pacific Horizon Government Fund and the $4.5-billion Pacific Horizon Prime Fund came on top of a $17.4-million capital addition the bank made to the Prime Fund earlier this quarter.
Taken together, the infusions from corporate sources will reduce its after-tax earnings for the second quarter ended Wednesday by $40 million, BankAmerica said. The company said it “continues to expect” that the quarter’s earnings will exceed first-quarter earnings of $1.27 per share.
Observers said the capital infusions were surprisingly large. “That’s a huge number,” said a fund manager at a rival investment firm.
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