State Street Launches Municipal Bond ETF

State Street Global Advisors (SSgA1), the investment management arm of State Street Corporation (NYSE: STT) and the largest institutional fund manager in the world2, today announced that the SPDR® Lehman Municipal Bond ETF (Ticker: TFI) will begin trading on the American Stock Exchange (Amex) on or about September 13, 2007.

Designed to offer investors the combined benefits of municipal bonds and exchange traded funds, the SPDR Lehman Municipal Bond ETF seeks to correspond to the price and yield performance of the Lehman Brothers Municipal Managed Money Index3. The Municipal Managed Money Index was launched in June 2004 with historical results provided since June 1993 by Lehman Brothers, one of the worlds leading underwriters and traders of municipal securities and a top ranked US bond index provider whose fixed income indices are used by more than 90 percent of US institutional investors. The index provides exposure to over 22,000 issues in the most liquid segment of the municipal bond market. The average credit quality of the municipal securities within the Index is AA1/AAA, and none of the bonds are currently subject to the Alternative Minimum Tax (AMT).

The SPDR Lehman Municipal Bond ETF was developed in lock-step with our clients who have asked for an investment vehicle that provides the advantages of Federal tax-free municipal bonds coupled with the additional benefits that ETFs offer, said Anthony Rochte, senior managing director of State Street Global Advisors. When its annual expense ratio of 0.20 percent4 is compared with municipal bond mutual funds, which have an average expense ratio of 1.10 percent5, the SPDR Lehman Municipal Bond ETF also offers more trading flexibility and a considerably lower expense ratio.

The SPDR Lehman Municipal Bond ETF complements State Streets growing family of fixed income ETFs. In May 2007, State Street launched five new SPDRs providing precise, low-cost access to an array of fixed income segments and maturities. These funds include:

  • SPDR® Lehman 1-3 Month T-Bill (BIL)
  • SPDR® Barclays TIPS ETF (IPE)
  • SPDR® Lehman Aggregate Bond ETF (LAG)
  • SPDR® Lehman Intermediate Term Treasury ETF (ITE)
  • SPDR® Lehman Long Term Treasury ETF (TLO)

State Street Global Advisors has managed fixed income index funds since 1984. Today, the firm manages more than $222 billion6 in total fixed income globally and more than $114 billion7 in ETF assets worldwide.

About State Street Global Advisors

State Street Global Advisors, the investment management arm of State Street Corporation (NYSE: STT), delivers investment strategies and integrated solutions to clients worldwide across every asset class, investment approach and style. With $1.9 trillion in assets under management as of June 30, 2007, State Street Global Advisors has investment centers in Boston, Hong Kong, London, Milan, Montreal, Munich, Paris, Singapore, Sydney, Tokyo and Zurich, and offices in 25 cities worldwide. For more information, visit State Street Global Advisors at www.ssga.com.

1 The Funds are advised by SSgA Funds Management Inc., a registered investment adviser and a wholly owned subsidiary of State Street Corporation.

2 Source: Pensions & Investments magazine, based on assets under management as of December 31, 2006.

3 Before fees and expenses.

4 The Advisor has contractually agreed to waive its advisory fee and reimburse certain expenses, until September 11, 2008, so that the Funds Net Annual and Operating Expenses are limited to 0.20% of the Funds average daily net assets. Unless renewed prior the waiver expiration, the expense ratio will revert to 0.30%.

5 Source: Lipper General Municipal Debt Index tracked by Lipper Analytical Services

6 As of June 30, 2007

7 As of July 31, 2007

ETFs trade like stocks, are subject to investment risk and will fluctuate in market value.

The municipal market is volatile and can be significantly affected by adverse tax, legislative or political changes and the financial condition of the issuers of municipal securities. Interest rate increases can cause the price of a debt security to decrease. A portion of the dividends you receive may be subject to federal, state, or local income tax or may be subject to the federal alternative minimum tax.

The market for municipal bonds may be less liquid than for taxable bonds. There may also be less information available on the financial condition of issuers of municipal securities than for public corporations. This means that it may be harder to buy and sell municipal securities, especially on short notice, and municipal securities may be more difficult to value accurately than securities of public corporations.

Bond funds contain interest rate risk (as interest rates rise bond prices usually fall); the risk of issuer default; and inflation risk.

Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.

Lehman Brothers and Lehman Brothers Inc. are trademarks of Lehman Brothers Inc. and have been licensed for use in connection with the listing and trading of the SPDR Lehman ETFs on the Amex. The products are not sponsored by, endorsed, sold or promoted by Lehman Brothers Inc. and Lehman Brothers Inc. makes no representation regarding the advisability of investing in them.

The SPDR trademark is used under license from The McGraw-Hill Companies, Inc. (McGraw-Hill). No financial product offered by State Street Corporation or its affiliates is sponsored, endorsed, sold or promoted by McGraw-Hill.

Distributor: State Street Global Markets, LLC, member FINRA, SIPC, a wholly owned subsidiary of State Street Corporation. References to State Street may include State Street Corporation and its affiliates.

Before investing, carefully consider the funds investment objectives, risks, charges and expenses. A prospectus, which contains this and other important information about the fund can be obtained by calling 866.787.2257. Read it carefully before investing.

10626-0908

Contacts:

State Street Corporation
Marie McGehee, 617-664-1898
or
River Communications
Troy Mayclim, 914-686-5599

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