Federated Ohio Municipal Cash trust to acquire $91 million assets from Touchstone Ohio Tax-Free

By Toni Weeks

San Luis Obispo, Calif., March 20 – Federated Investors, Inc., said it has reached a definitive agreement to acquire assets of the Touchstone Ohio Tax-Free Money Market Fund, a series of Touchstone Tax-Free Trust.

About $91 million in tax-free money-market assets will be reorganized into the Federated Ohio Municipal Cash Trust from the Touchstone fund, according to a press release. The Federated Ohio fund is a portfolio of Federated Money Market Obligations Trust.

“In light of the changing regulatory landscape with respect to money market funds, we sought a party that had a commitment to the money-market fund business,” Steve Graziano, president of Touchstone Investments, said in the press release. “Federated offers shareholders of the Touchstone Ohio Tax-Free Money Market Fund the opportunity to continue their investments in a larger fund with comparable investment objectives, investment strategies, tax benefits, expenses and performance.”

According to a 497 filing with the Securities and Exchange Commission, the board of trustees of Touchstone Tax-Free Trust rescinded the plan at a meeting on March 19 to close and liquidate the Touchstone Ohio fund and approved the agreement and plan of reorganization with Federated.

In the reorganization, the Touchstone fund’s class A and institutional class shares will become service shares and institutional shares of the Federated fund.

The reorganization is expected to be tax-free. Shareholder approval is required at a meeting of shareholders on May 29. If approved, the reorganization is expected to take place on June 19.

The Touchstone Ohio fund seeks the highest level of current income exempt from federal income tax and Ohio personal income tax, consistent with liquidity and stability of principal, and invests primarily in high-quality, short-term Ohio municipal obligations issued by the state of Ohio, its agencies and municipalities that pay interest that is exempt from both federal income tax and Ohio personal income tax.

Hartford-based Touchstone Advisors, Inc. is the investment adviser to the Touchstone Ohio fund. Federated Investment Management Co. is the investment adviser to the Federated Ohio fund.

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