ASHLAND, Mass. (February 3, 1997) -- Strong Heritage Money Fund, the nation's top-yielding retail money market mutual fund, and two other Strong funds no longer hold commercial paper issued by Mercury Finance Corp., which defaulted on a $17 million payment last Friday.

Strong Capital Management last week purchased an undisclosed amount of Mercury Finance paper from three taxable Strong money funds. That means the funds are in no danger of "breaking the buck" ($1 per share NAV) and shareholders won't suffer any losses.

Jody Lowe, a Strong spokesperson, told IBC's Money Fund Monitor online service that Strong "had adequate resources to do the right thing," adding that SCM no longer has exposure to Mercury's defaulted paper.

Semiannual reports reviewed by IBC listed Strong Heritage with $75 million in Mercury paper while Strong Institutional MMF held $6.1 million as of last Aug. 31. Strong Money Market Fund was said to own nearly $98 million of Mercury paper, as of Oct. 31. Strong now says the actual holdings were smaller than those cited in the funds' own reports.

In any event, there could be as much as $500 million in Mercury commercial paper still to be accounted for, meaning that additional fallout is anticipated.

Peter Crane, IBC's managing editor, foresees more money fund bailouts, but "we think the money fund industry has seen the worst of it and that no individual money fund investor will lose money" due to the Mercury Finance collapse.

IBC's Money Fund Monitor ($1,800 per year) is a premium online service of IBC Financial Data, Inc. The free portion of IBC's Web Site (http://www.ibcdata.com) provides individual investors with weekly yield rankings, commentary and special reports at no charge.

IBC Financial Data publishes IBC's Money Fund Report, the premier information source for performance, assets, average maturities and portfolio composition for more than 1,200 taxable and tax-free money funds.