S&P slashes credit rating on 'safe' Mellon fund.

Financial News, November, 2002

Mellon Financial, one of the US's largest financial services companies, has injected $4m ([euro]4.03m) into one of its funds after what was meant to be an ultra-safe investment was dramatically downgraded from AAA to D by Standard & Poor's.The credit ratings agency slashed the rating of the Newton Corporate Money Fund, which is managed by Mellon's London-based subsidiary Newton Investment Management.

The $170m Newton Corporate Money Fund, which is based in Jersey, went from AAA to D overnight last Tuesday after Standard & Poor's became increasingly worried about one of its holdings, debt owned by the US insurer Allmerica Global. Fears were circulating in the market that Allmerica might not be able to repay the debt.