Mainsail loss at $13M
Maine will likely have to write off millions on an investment gone sour because of the subprime crisis.
The state last August invested $20 million in the mortgage-backed fund Mainsail II, which at the time had a strong credit rating. But less than two weeks later, the fund was frozen and downgraded to junk status. On June 30, the close of the recent fiscal year, Maine's investment in Mainsail was worth less than $7 million and State Treasurer David Lemoine said the fund will likely be auctioned off in September, according to the State House News Service.
Lemoine told the news service the state treasury will use income earned on other investments to cover the loss, and that the state made 2% on its investments last year despite Mainsail. In related news, Maine's attorney general's office continues to investigate whether the state's investment advisor Merrill Lynch can be held accountable for the Mainsail loss.
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