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This excerpt taken from the WBMD DEF 14A filed Nov 5, 2008. Investment
in Auction Rate Securities Backed by Federally Guaranteed
Student Loans
As of February 21, 2008, the Company had approximately
$327,000 in consolidated cash, cash equivalents and marketable
securities, including approximately $169,000 of ARS investments.
The types of ARS investments that the Company owns are backed by
student loans, 97% of which are guaranteed under the Federal
Family Education Loan Program (FFELP), and all had credit
ratings of AAA or Aaa when purchased. WebMD does not own any
other type of ARS investments.
The interest rates on these ARS investments are reset every
28 days by an auction process. Historically, these types of
ARS investments have been highly liquid. However, in
mid-February
2008, auctions for ARS investments backed by student loans
failed, including auctions for the ARS investments held by the
Company. The result of a failed auction is that these ARS
investments continue to bear interest in accordance with their
terms until the next successful auction; however, liquidity will
be limited until there is a successful auction or until such
time as other markets for these ARS investments develop. The
Company believes that the underlying credit quality of the
assets backing its ARS investments has not been impacted by the
reduced liquidity of these ARS investments. As a result of these
recent events, the Company is in the process of evaluating the
extent of any impairment in its ARS investments resulting from
the current lack of liquidity; however, the Company is not yet
able to quantify the amount of any impairment. The Company
believes that any lack of liquidity relating to its ARS
investments will not have an impact on its ability to fund its
current operations.
These excerpts taken from the WBMD 10-K filed Feb 29, 2008. Investment
in Auction Rate Securities Backed by Federally Guaranteed
Student Loans
As of February 21, 2008, the Company had approximately
$327,000 in consolidated cash, cash equivalents and marketable
securities, including approximately $169,000 of ARS investments.
The types of ARS investments that the Company owns are backed by
student loans, 97% of which are guaranteed under the Federal
Family Education Loan Program (FFELP), and all had credit
ratings of AAA or Aaa when purchased. WebMD does not own any
other type of ARS investments.
The interest rates on these ARS investments are reset every
28 days by an auction process. Historically, these types of
ARS investments have been highly liquid. However, in
mid-February
2008, auctions for ARS investments backed by student loans
failed, including auctions for the ARS investments held by the
Company. The result of a failed auction is that these ARS
investments continue to bear interest in accordance with their
terms until the next successful auction; however, liquidity will
be limited until there is a successful auction or until such
time as other markets for these ARS investments develop. The
Company believes that the underlying credit quality of the
assets backing its ARS investments has not been impacted by the
reduced liquidity of these ARS investments. As a result of these
recent events, the Company is in the process of evaluating the
extent of any impairment in its ARS investments resulting from
the current lack of liquidity; however, the Company is not yet
able to quantify the amount of any impairment. The Company
believes that any lack of liquidity relating to its ARS
investments will not have an impact on its ability to fund its
current operations.
Investment in Auction Rate Securities Backed by Federally Guaranteed Student Loans As of February 21, 2008, the Company had approximately $327,000 in consolidated cash, cash equivalents and marketable securities, including approximately $169,000 of ARS investments. The types of ARS investments that the Company owns are backed by student loans, 97% of which are guaranteed under the Federal Family Education Loan Program (FFELP), and all had credit ratings of AAA or Aaa when purchased. WebMD does not own any other type of ARS investments. The interest rates on these ARS investments are reset every 28 days by an auction process. Historically, these types of ARS investments have been highly liquid. However, in mid-February 2008, auctions for ARS investments backed by student loans failed, including auctions for the ARS investments held by the Company. The result of a failed auction is that these ARS investments continue to bear interest in accordance with their terms until the next successful auction; however, liquidity will be limited until there is a successful auction or until such time as other markets for these ARS investments develop. The Company believes that the underlying credit quality of the assets backing its ARS investments has not been impacted by the reduced liquidity of these ARS investments. As a result of these recent events, the Company is in the process of evaluating the extent of any impairment in its ARS investments resulting from the current lack of liquidity; however, the Company is not yet able to quantify the amount of any impairment. The Company believes that any lack of liquidity relating to its ARS investments will not have an impact on its ability to fund its current operations. | EXCERPTS ON THIS PAGE:
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