Hawaii's state Employees Retirement System, which suffered an $11.3 million loss when energy trader Enron Corp. collapsed, is expected to lose the majority of the $2.7 million it owns in corporate bonds issued by embattled telecom giant WorldCom Inc. Retirement system has
little loss in WorldComBy Dave Segal
dsegal@starbulletin.comWorldCom, which reportedly may file for Chapter 11 reorganization bankruptcy as early as Sunday, has been negotiating with banks about its options and has been sued by the Securities and Exchange Commission and shareholders. WorldCom missed interest payments Monday on its bonds, which now trade at about 15 cents on the dollar, Bloomberg News reported traders as saying. Last month, WorldCom disclosed that it hid $3.9 billion in expenses.
David Shimabukuro, an administrator with the ERS, said one of the Hawaii pension fund's money managers had bond exposure to WorldCom but that "we're happy to say we didn't have any stock in WorldCom at the end of June when the news hit."
"The $2.7 million out of a total of $8 billion in the fund represents a very small number (0.03 percent) although we are very concerned about the money," Shimabukuro added.
WorldCom's stock, down more than 99 percent for the year, closed yesterday at 9 cents.
The ERS, which operates on a fiscal year, lost 6.68 percent, or $679.6 million, in its pension fund in the fiscal year that ended June 30, 2001. The fund employs 30 investment managers who invest in both domestic and foreign stocks and bonds, as well as real estate and venture capital.
Results of the current fiscal year just ended are expected sometime in August.
State of Hawaii
