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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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SIGNATURE STEVEN KEANE
TITLE GENERAL COUNSEL
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000856517
<NAME> MONEY MARKET MANAGEMENT, INC.
<SERIES>
<NUMBER> 001
<NAME> MONEY MARKET MANAGEMENT, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Dec-31-1999
<INVESTMENTS-AT-COST> 75,713,258
<INVESTMENTS-AT-VALUE> 75,713,258
<RECEIVABLES> 1,359,923
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 77,073,181
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 221,875
<TOTAL-LIABILITIES> 221,875
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 76,851,306
<SHARES-COMMON-STOCK> 76,851,306
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 76,851,306
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,218,598
<OTHER-INCOME> 0
<EXPENSES-NET> (898,518)
<NET-INVESTMENT-INCOME> 3,320,080
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 3,320,080
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,320,080)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 151,126,645
<NUMBER-OF-SHARES-REDEEMED> (160,820,672)
<SHARES-REINVESTED> 3,085,353
<NET-CHANGE-IN-ASSETS> (6,608,674)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 399,978
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,058,321
<AVERAGE-NET-ASSETS> 80,001,523
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.040
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> (0.040)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 1.12
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.000
</TABLE>
Item 77 C -- Submission of Matters to a Vote of Security Holders
A Special Meeting of Shareholders of Money Market Management was held on
November 30, 1999. The following items, which are required to be
reported under this Item 77C, were approved at the meeting:
1. Election of Directors:
Names
For
Against
Abstentions
and
Broker Non-
Votes
Withheld
Authority To
Vote
John F.
Cunningham
48,904,275
1,398,805
Charles F.
Mansfield,
Jr.
48,904,787
1,398,293
John S.
Walsh
48,893,775
1,409,305
2. To approve an amendment to, and a restatement of, the Fund's
Articles of Incorporation to permit the Board to liquidate assets of
the Fund, its series or classes, and distribute the proceeds of such
assets to holders of such shares representing such interests, without
seeking shareholder approval to the extent permitted under Maryland
law.
For
Against
Abstain
Broker Non-Votes
41,914,728
2,858,617
2,062,426
3,467,309
3. To approve a proposed Agreement and Plan of Reorganization between
the Fund and Money Market Obligations Trust, on behalf of its series,
Money Market Management (the "New Fund"), whereby the New Fund would
acquire all of the assets of the Fund in exchange for shares of the New
Fund to be distributed pro rata by the Fund to its shareholders in
complete liquidation and termination of the Fund.
For
Against
Abstain
Broker Non-Votes
42,598,173
2,021,292
2,216,306
3,467,309
ITEM 77K MONEY MARKET OBLIGATIONS TRUST
CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
On May 19, 1999, the Fund's Board of Directors, upon the recommendation
of the Audit Committee of the Board of Directors, requested and
subsequently accepted the resignation of Deloitte & Touche LLP ("D&T")
independent auditors. ("D & T")'s reports on the Fund's financial
statements for the fiscal years ended December 1998 and December 1997,
contained no adverse opinion or disclaimer of opinion nor were they
qualified or modified as to uncertainty, audit scope or accounting
principles. During the Fund's fiscal years ended December 1998 and
December 1997,(i) there were no disagreements with D& T on any matter of
accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of D&T, would have caused it to make reference to the
subject matter of the disagreements in connection with its reports on
the financial statements for such years, and (ii) there were no
reportable events of the kind in Item 304(a)(1)(v) of Regulation S-K
under the Securities Exchange Act of 1934, as amended.
The Corporation, by action of its Board of Directors, engaged Ernst &
Young LLP
("E & Y") as the independent auditors for purposes of auditing the
Corporation's financial statements for the fiscal year ending December
31, 1999. During the Period, neither the Corporation nor anyone on the
Corporation's behalf has consulted E & Y on items which (i) concerned
the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on the Corporation's financial statements or (ii) concerned the
subject of a disagreement ( as defined in paragraph (a)(1)(iv) of Item
304 of Regulation S-K) or reportable events ( as described in paragraph
(a)(1)(v) of said Item 304).
MONEY MARKET MANAGEMENT
Item 77N Actions Required to be Reported Pursuant to Rule 2a-7
The following Executive Committee and Board of Directors meeting minutes
and Letters to the SEC describe action taken during the Money Market
Management Inc. reporting period prior to that Fund's merger into Money
Market Management, a portfolio of Money Market Obligations Trust, with
respect to defaulted securities held during the period covered by this
report.
MINUTES OF THE MEETING
HELD AUGUST 10, 1999
OF THE EXECUTIVE COMMITTEE OF:
Money Market Obligations Trust ("MMOT")
(the "Funds")
________________________________________________________________________
Pursuant to call, a telephonic meeting (the "Meeting") of the
Funds convened at 4:30 P.M. on Tuesday, August 10, 1999 at the Federated
Investors, Inc. ("Federated") Tower, Pittsburgh, Pennsylvania.
The following members, constituting the Executive Committee (the
"Committee"), were present at the meeting:
John F. Donahue (by telephone)
John E. Murray, Jr., J.D. (by telephone)
The following persons were also present in person, unless noted
otherwise, at the Meeting:
G. Andrew Bonnewell, Senior Corporate Counsel, Federated
Jonathan Conley, Senior Vice President, Federated Global
Investment Management Company, Federated Investment Counseling,
Federated Investment Management Company, and Passport Research Limited
("Federated Advisory Companies")
William D. Dawson, III, Executive Vice President and Chief
Investment Officer, Federated Advisory Companies
J. Christopher Donahue (via telephone), President and Chief
Executive Officer, Federated; President, Federated Advisory
Companies; Officer of the Funds
Thomas R. Donahue, Vice President, Chief Financial Officer and
Treasurer, Federated
Emily H. Emigh, Senior Vice President, Federated Administrative
Services ("FAS"); Director of Internal Audit, Federated
Raymond Hanley, Senior Vice President, Federated Investors
Management Company ("FIMCo")
Stephen A. Keen, General Counsel, Federated
Suzanne W. Land, Paralegal Supervisor, Federated
Denis McAuley, III, Senior Vice President, FIMCo, Vice President,
FII Holdings, Inc., and Assistant Treasurer, Federated
John W. McGonigle, Chief Legal Officer and Executive Vice
President, Federated; Officer of the Funds
Leslie K. Ross, Associate Corporate Counsel, Federated
Richard J. Thomas, Vice President, FAS
Mr. Stephen A. Keen stated that the purpose of the meeting was to
discuss the likely default of funding agreements (the "Funding
Agreements") issued by General American Life Insurance Company
("General American") and held by Automated Cash Management Trust
("ACMT"), a portfolio of MMOT; Federated Master Trust ("FMT"), a
portfolio of MMOT; Federated Prime Money Fund II ("IFPMF"), a
portfolio of FINS; MMM; MMT; and Prime Cash Series ("PCS"), a
portfolio of CTSI (collectively, "the Money Market Funds"). Mr. Keen
described the structure of the Funding Agreements, indicating that they
were contracts between General American and the Money Market Funds. Mr.
Keen reported that each of the Funding Agreements included a demand
feature, exercisable on seven days' notice, which entitled the Money
Market Funds to receive their invested funds back from General American.
He noted that the Money Market Funds had exercised their demand features
on August 4, 1999, and were due payment from General American on August
11, 1999. He reported that earlier in the day, Federated Investment
Management Company (the "Adviser"), investment adviser to the Money
Market Funds, had received information that General American had
defaulted on similar funding agreements with other investors who had
exercised demand features. In addition, the Adviser had discovered
that General American had requested and received administrative
supervision from the Missouri insurance commissioner. Mr. Keen noted
such action could constitute an event of insolvency under Rule 2a-7 of
the Investment Company Act of 1940. He added that it was likely that
the Adviser would determine that the Funding Agreements no longer
presented minimal credit risks. Mr. Keen said that as a consequence,
the Money Market Funds were required to dispose of the Funding
Agreements unless the Board of Directors of the Money Market Funds found
that such disposal would not be in the best interests of the Money
Market Funds. Mr. Keen asked Mr. Dawson to provide background on the
General American situation.
Mr. William D. Dawson, III indicated that the General American
situation resulted from its issuance of a significant amount of short-
term funding agreements to large institutional investors, primarily
money market funds. He said that the funding agreements included a
demand feature exercisable on seven days' notice. He indicated that on
July 30, 1999, Moody's Investors Services, Inc. ("Moody's") downgraded
General American's long-term rating from A2 to A3 and a large number of
investors exercised their demand features. Mr. Dawson said that this
required General American to raise a significant amount of cash within a
short time frame, and that it had inadequate liquidity resources to do
so.
Mr. Dawson noted that in a press release earlier in the day,
General American had indicated that it was well capitalized and had
adequate assets to meet its obligations. He further noted that the
press release indicated that General American had requested
administrative supervision to allow it to respond to its institutional
investors, making certain that all its obligations were honored. Mr.
Dawson indicated that based on such information, he believed that the
General American situation was an issue of liquidity, not insolvency,
and that a loss under the Funding Agreements was unlikely.
Mr. Dawson then chronicled recent ratings of General American. He
reported that on March 5, 1999, Moody's downgraded General American's
long-term rating from A1 to A2. He said that shortly thereafter,
Federated downgraded its rating of General American from a 3 to a 4. Mr.
Dawson said that on July 30, 1999, Moody's downgraded General American's
long-term rating from A2 to A3. Mr. Dawson noted that on August 9,
1999, Moody's downgraded General American's long-term rating from A3 to
Ba1 and Standard & Poor's ("S&P") downgraded General American's short-
term rating from A-1+ to A-3. On August 10, 1999, S&P downgraded
General American's short-term ratings from A-3 to R and Duff & Phelps
Credit Rating Co. downgraded General American's short-term and long
term-ratings from D-1/AA to D-5/DD. Mr. Keen interjected that due to the
prior day's downgrades, the Funding Agreements were not eligible
securities for the Money Market Funds.
Mr. Keen then noted that the net asset value of the Money Market
Funds was protected by portfolio insurance issued by a subsidiary of
Zurich American Insurance Group. Mr. Keen explained that the insurance
policy provides that, in the event of a default in a portfolio of any of
the Money Market Funds, the insurance company will pay the fund the
amount, up to the policy limit, necessary for the Money Market Funds to
continue to price their shares at $1.00. Mr. Keen noted that the
insurance policy provides coverage for losses up to $150,000,000. Mr.
Dawson interjected that there was minimal risk that, if the Funding
Agreements were not paid in full, the loss would exceed the Money Market
Funds' default insurance coverage.
Mr. Keen then discussed options for resolving the issue and
pricing the Money Market Funds. He indicated that the Money Market
Funds could either liquidate or retain the Funding Agreements. However,
he noted that an immediate liquidation was not viable because the
Funding Agreements were actually contracts between General American and
the Money Market Funds, and were thus not readily transferable. Mr.
Dawson interjected that market conditions would likely affect the
orderly disposition of the Funding Agreements, even if they could be
transferred. Mr. Keen then discussed the means for valuing shares.
After full discussion, the Executive Committee of each of the Funds,
individually, and unanimously,
RESOLVED, that the Executive Committee of the Money Market
Funds hereby determines that each of the Money
Market Funds could continue to use the amortized
cost method of valuing its shares and that it
was not in the best interest of the Money Market
Funds to liquidate the funding agreements.
The Committee then agreed to submit this determination to the
Board for ratification. It was also noted that the Committee
would reconvene, if necessary.
There being no further business to come before the Committee, the
meeting was thereupon duly adjourned.
Respectfully submitted,
/s/ John F. Donahue
John F. Donahue
/s/ John E. Murray, Jr. J.D.
John E. Murray, Jr., J.D.
MINUTES OF THE MEETING
HELD AUGUST 11, 1999
OF THE BOARDS OF:
Money Market Obligations Trust ("MMOT")
("the Funds")
________________________________________________________________________
Pursuant to call, a Special Telephonic Meeting (the "Meeting")
of the Board of Directors (the "Board") of the Funds convened at
10:00 A.M. on Wednesday, August 11, 1999, at Federated Investors, Inc.
("Federated") Tower, Pittsburgh, Pennsylvania.
The following members, constituting the full Board, with the
exception of Peter E. Madden, were present at the Meeting via
telephone (unless noted otherwise):
John F. Donahue (in person) J. Christopher Donahue
Thomas G. Bigley Lawrence D. Ellis, M.D.
John T. Conroy, Jr. Edward L. Flaherty,Jr.
Nicholas P. Constantakis Charles F. Mansfield,Jr.
William J. Copeland John E. Murray,Jr., J.D.
John F. Cunningham Wesley W. Posvar
Marjorie P. Smuts
John S. Walsh
The following persons were also present in person (unless noted
otherwise) at the Meeting:
G. Andrew Bonnewell, Senior Corporate Counsel, Federated
Jonathan Conley, Senior Vice President, Federated Global
Investment Management Company, Federated Investment Counseling,
Federated Investment Management Company, and Passport Research Limited
("Federated Advisory Companies")
William D. Dawson, III, Executive Vice President and Chief
Investment Officer, Federated Advisory Companies
J. Christopher Donahue, President and Chief Executive Officer,
Federated; President, Federated Advisory Companies; Officer of the
Funds (via telephone)
Thomas R. Donahue, Vice President, Chief Financial Officer and
Treasurer, Federated
Emily H. Emigh, Senior Vice President and Director of Internal
Audit, Federated Administrative Services ("FAS")
Raymond Hanley, Senior Vice President, Federated Investors
Management Company ("FIMCo")
Stephen A. Keen, General Counsel, Federated
Suzanne W. Land, Paralegal Supervisor, Federated
Denis McAuley, III, Senior Vice President, FIMCo, Vice President,
FII Holdings, Inc., and Assistant Treasurer, Federated
John W. McGonigle, Chief Legal Officer and Executive Vice
President, Federated; Officer of the Funds
Matthew G. Maloney (via telephone), Partner, Dickstein Shapiro
Morin & Oshinsky LLP; Special Counsel to the Funds
Leslie K. Ross, Associate Corporate Counsel, Federated
Richard J. Thomas, Vice President, FAS
Mr. John F. Donahue served as Chairman and Mr. John W. McGonigle
recorded the proceedings as Secretary.
Mr. Stephen A. Keen stated that the purpose of the meeting was to
discuss funding agreements (the "Funding Agreements") issued by
General American Life Insurance Company ("General American") and held
by Automated Cash Management Trust ("ACMT"), a portfolio of MMOT;
Federated Master Trust ("FMT"), a portfolio of MMOT; Federated Prime
Money Fund II ("IFPMF"), a portfolio of FINS; MMM; MMT; and Prime Cash
Series ("PCS"), a portfolio of CTSI (collectively, "the Money Market
Funds"). Mr. Keen reported that the Funding Agreements were no longer
eligible securities under Rule 2a-7 of the Investment Company Act of
1940. He described the structure of the Funding Agreements,
indicating that they were contracts between General American and the
Money Market Funds. Mr. Keen reported that each of the
Funding Agreements included a demand feature, exerciseable on
seven days' notice, which entitled the Money Market Funds to
receive their invested funds back from General American. He
noted that the Money Market Funds had exercised their demand
features on August 4, 1999, and were due payment from General
American on August 11, 1999. He reported that on August 10,
1999, Federated Investment Management Company (the
"Adviser"), investment adviser to the Money Market Funds,
had received information that General American had defaulted
on similar funding agreements with other investors who had
exercised demand features. In addition, the Adviser had
discovered that General American had requested and received
administrative supervision from the Missouri insurance
commissioner. Mr. Keen noted that such action could
constitute an event of insolvency under Rule 2a-7. He added
that it was likely that the Adviser would determine that the
Funding Agreements no longer presented minimal credit risks.
Finally, he noted that as a result of ratings downgrades on
August 9, 1999, the Funding Agreements were no longer eligible
securities for the Money Market Funds. Mr. Keen said that as
a consequence, the Money Market Funds were required to dispose
of the Funding Agreements absent a finding by the Board of
Directors of the Money Market Funds that such disposal would
not be in the best interests of the Money Market Funds. Mr.
Keen asked Mr. Dawson to provide background on the General
American situation.
Mr. William D. Dawson, III indicated that the General American
situation resulted from its issuance of a significant amount of short-
term funding agreements to large institutional investors, primarily
money market funds. He said that the funding agreements included a
demand feature exerciseable on seven days' notice. He indicated that on
July 30, 1999, Moody's Investors Service ("Moody's") downgraded
General American's long-term rating from A2 to A3 and a large number of
investors exercised their demand features. Mr. Dawson said that this
required General American to raise a significant amount of cash within a
short time frame, and that it had inadequate liquidity resources to do
so.
Mr. Dawson noted that in a press release issued on August 10,
1999, General American had indicated that it was well capitalized and
had adequate assets to meet its obligations. He further noted that the
press release indicated that General American had requested
administrative supervision to allow it to respond to its institutional
investors, making certain that all its obligations were honored. Mr.
Dawson indicated that based on such information, he believed that the
General American situation was an issue of liquidity, not insolvency,
and that a loss under the Funding Agreements was unlikely.
Mr. Dawson then chronicled recent ratings of General American. He
reported that on March 5, 1999, Moody's downgraded General American's
long-term rating from A1 to A2. He said that shortly thereafter,
Federated downgraded its rating of General American from a 3 to a 4.
Mr. Dawson said that on July 30, 1999, Moody's downgraded General
American's long-term rating from A2 to A3. Mr. Dawson noted that on
August 9, 1999, Moody's downgraded General American's long-term rating
from A3 to Ba1 and Standard & Poor's ("S&P") downgraded General
American's short-term rating from A-1+ to A-3. On August 10, 1999, S&P
downgraded General American's short-term ratings from A-3 to R and Duff
& Phelps Credit Rating Co. downgraded General American's short-term and
long-term ratings from D-1/AA to D-5/DD. Mr. Keen interjected that due
to the prior day's downgrades, the Funding Agreements were not eligible
securities for the Money Market Funds.
Mr. Keen then noted that the net asset value of the Money Market
Funds was protected by portfolio insurance issued by a subsidiary of
Zurich American Insurance Group. Mr. Keen explained that the insurance
policy provides that, in the event of a default in a portfolio of any of
the Money Market Funds, the insurance company will pay the fund the
amount, up to the policy limit, necessary for the Money Market Funds to
continue to price their shares at $1.00. Mr. Keen noted that the
insurance policy provides coverage for losses up to $150,000,000. Mr.
Dawson interjected that there was minimal risk that, if the Funding
Agreements were not paid in full, the loss would exceed the Money Market
Funds' default insurance coverage.
Mr. Dawson indicated that the Money Market Funds hold $320
million in Funding Agreements. He informed the Board that a
representative of J.P. Morgan & Co. had contacted the Adviser on August
10, 1999 and indicated that they would like to discuss the possibility
of engaging in credit swaps and that the Adviser was going to explore
such possibility.
Mr. Keen reviewed the discussions that had taken place at the
Executive Committee Meeting held on August 10, 1999. He indicated that
action alternatives had been debated, and that the Committee had
resolved that the Money Market Funds should not liquidate their
positions in General American, and that the Money Market Funds could
continue to use the amortized cost method of valuating their shares.
Mr. Keen explained to the Board that it was their responsibility
to determine whether the security should be liquidated or retained. He
noted that an immediate liquidation was not viable because the Funding
Agreements were actually contracts between General American and the
Money Market Funds, and were thus not readily transferable. Mr. Dawson
interjected that market conditions would likely affect the orderly
disposition of the Funding Agreements, even if they could be
transferred. Mr. Keen then discussed the means for valuing shares.
After full discussion, on motion duly made and seconded, the full Boards
present of each of the Funds, individually, unanimously
RESOLVED, that the Boards of Directors of the Money Market
Funds hereby determine that it is not in the
best interest of the Money Market Funds to
liquidate the securities, and further determines
that each of the Money Market Funds will
continue to use the amortized cost method of
valuation to value its shares.
There being no further business, on motion duly made and seconded,
the Meeting was thereupon duly adjourned.
Respectfully submitted,
/s/ John W. McGonigle
John W. McGonigle
Secretary
Federated Investors
Management Co.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
412-288-1900 Phone
www.federatedinvestors.com
August 11, 1999
By FAX and Overnight Mail
Mr. Paul Roye
Director of the Division of Investment Management
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Money Market Management ("MMM")
Dear Mr. Roye:
This letter is to follow up the letter (the "Letter") that Federated
Investment Management Company (the "Adviser"), as investment adviser
to the above-referenced investment companies (collectively, the
"Funds"), provided earlier today pursuant to the Rule 2a-7(c)(6)(iii)
under the Investment Company Act of 1940.
On August 11, 1999, the Funds' Boards of Directors ("Boards") met with
regard to the issue described in the Letter and affirmed the
determinations made on August 10, 1999 by the Executive Committee of the
Funds' Boards. Specifically, the Boards determined that each Fund could
continue to use the Amortized Cost Method of valuing its shares in
accordance with Rule 2a-7. The Boards therefore determined that it
would be in the best interest of the Funds' shareholders to continue to
hold the funding agreements issued by General American Life Insurance
Company, St. Louis, Missouri.
Please contact me at (412) 288-1412 or Leslie K. Ross at (412) 288-7404
if you would like any further information on this matter.
Very truly yours,
Federated Investment Management Company
By: /s/G. Andrew Bonnewell
G. Andrew Bonnewell
Vice President and Secretary
Federated Investors
Management Co.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
412-288-1900 Phone
www.federatedinvestors.com
August 11, 1999
By FAX and Overnight Mail
Mr. Paul Roye
Director of the Division of Investment Management
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Money Market Management ("MMM")
Dear Mr. Roye:
Pursuant to rule 2a-7(c)(6)(iii) of the Investment Company Act of 1940
(the "1940 Act"), Federated Investment Management Company (the
"Adviser"), as investment adviser to the above-referenced, registered,
open-end investment companies (collectively, the "Funds"), hereby
notifies the Commission of: (1) an imminent default with respect to
various funding agreements issued by General American Life Insurance
Company, St. Louis, Missouri ("General American") held by the Funds
(the "Funding Agreements"); and (2) a possible "Event of Insolvency"
of the Funding Agreement' issuer, General American.
At the time of its purchase, each Funding Agreement was a First Tier
Security, as defined by Rule 2a-7 of the 1940 Act (the "Rule"). The
Funds purchased the Funding Agreements in the following amounts:
Fund Principal Amount % of Total Fund Assets
ACMT $122,500,000 5.156%1
PCS $172,000,000 3.763%
FMT $10,000,000 2.538%
MMT $10,000,000 2.433%
MMM $3,500,000 4.311%
IFPMF $2,000,000 1.369%
______________________________
1 At the time of purchase, Funding Agreements comprised less than 5% of
ACMT's total assets. Net redemptions have resulted in ACMT's Funding
Agreements exceeding 5% of its total assets.
Each of the Funding Agreements included a Demand Feature (as defined
in the Rule) that the Funds may exercise upon seven days' notice. On
August 4, 1999, the Funds exercised their Demand Features. On
August 9, 1999 the investment ratings of General American were downgraded
so that its Funding Agreements were no longer Eligible Securities. On
August 10, 1999 the Adviser received information that General American
failed to timely repay similar funding agreements bought by other
purchasers who exercised their Demand Features. Finally, on
August 10, 1999 General American requested and received administrative
supervision from the Missouri insurance commissioner, which may
constitute an Event of Insolvency, as defined by the Rule. However,
General American has publicly stated that it has sufficient assets to
fulfill its obligations (including accrued interest) and intends to do so.
As a result of these events, the Executive Committee of the Funds' Board
of Directors ("Executive Committee") convened on August 10, 1999 to
discuss the Adviser's assessment of General American's financial
condition. The Adviser indicated that a loss under the Funding
Agreements was unlikely. Moreover, the Adviser stated that there was
minimal risk that, if the funding Agreements were not paid in full, the
loss would exceed the Funds' default insurance coverage. After
consideration of the Adviser's assessment of General American's financial
condition and the amount of insurance coverage available to the Funds
(including the deductible to which the Funds would be subject), the
Executive Committee determined that each Fund could continue to use the
Amortized Cost Method of valuing its shares in accordance with the Rule.
The Executive Committee therefore determined that it would be in the best
interest of the Funds' shareholders to continue to hold the Funding
Agreements.
Please contact me at (412) 288-1412 or Leslie K. Ross at (412) 288-7404
if you would like any further information on this matter.
Very truly yours,
Federated Investment Management Company
By: /s/G. Andrew Bonnewell
G. Andrew Bonnewell
Vice President and Secretary
/jif
cc: Stephen A. Keen, Esq.
19
Mr. Paul Roye
August 11, 1999
Page 19
26
Mr. Paul Roye
August 11, 1999
Page 26
Report of Independent Auditors
To the Shareholders and
Board of Trustees of
Money Market Management:
In planning and performing our audit of the
financial statements of Money Market Management
(one of the portfolios comprising Money Market
Obligations Trust) for the year ended December 31,
1999, we considered its internal control, including
control activities for safeguarding securities,
in order to determine our auditing procedures for
the purpose of expressing our opinion on the
financial statements and to comply with the
requirements of Form N-SAR, not to provide
assurance on internal control.
The management of Money Market Management is
responsible for establishing and maintaining
internal control. In fulfilling this
responsibility, estimates and judgments by
management are required to assess the expected
benefits and related costs of controls.
Generally, controls that are relevant to an
audit pertain to the entity's objective of
preparing financial statements for external
purposes that are fairly presented in conformity
with generally accepted accounting principles.
Those controls include th
Because of inherent limitations in
internal control, error or fraud may occur and
not be detected. Also, projection of any evaluation
of internal control to future periods is subject to
the risk that it may become inadequate because of
changes in conditions or that the effectiveness of
the design and operation may deteriorate.
Our consideration of internal control would
not necessarily disclose all matters in internal
control that might be material weaknesses under
standards established by the American Institute of
Certified Public Accountants. A material weakness
is a condition in which the design or operation of
one or more of the internal control components does
not reduce to a relatively low level the risk that
misstatements caused by error or fraud in amounts
that would be material in relation to the financial
statements be
This report is intended solely for the information
and use of management, the Board of Trustees of
Money Market Management, and the Securities
and Exchange Commission and is not intended to be
and should not be used by anyone other than
these specified parties.
Boston, Massachusetts
February 16, 2000
