Sept 6 PNC Financial Services Group Inc
said it was winding down Market Street Funding LLC, an
investment vehicle that issues short-term debt to fund credit
facilities for the bank's clients.
The decision is part of a strategy to diversify and extend
PNC's borrowing base in light of ongoing regulatory
developments, the company said in a filing with the U.S.
Securities and Exchange Commission. ()
A PNC spokesman told Reuters that the regulatory
developments mentioned in the filing relate to liquidity
coverage ratios, which determine how much liquid assets
financial institutions can hold.
As part of the wind-down, commitments and outstanding loans
of Market Street will be assigned to PNC Bank. Market Street had
$5.9 billion of commercial paper outstanding as of June 30, PNC
said in the filing.
Market Street is classified as a variable interest entity
(VIE), owned by an independent third party and administered by
Financial firms have used VIEs to finance investments in
subprime mortgage-backed securities while keeping them off the
PNC said it did not expect the wind-down, which will be
completed by the end of the fourth quarter, to have a material
impact on the bank's financial condition or results.
The company's shares, which have fallen 5 percent in the
last month, were marginally up at $73.53 in afternoon trading on
Thursday on the New York Stock Exchange.