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Legg Mason Seeks Solutions for Auction-Rate Buyers

U.S. money manager Legg Mason said Friday it is exploring solutions to provide liquidity to holders of auction-rate preferred securities issued by seven closed-end funds of its affiliates.

Closed-end funds issue these securities to borrow and boost returns. However, the credit crunch has disrupted the market for these securities and rendered them illiquid.

Legg Mason said in a statement the seven funds of its affiliates have issued about $672 million of these securities.