Bank of America reports USD1.5 billion funds added to purchase leveraged loans

By IVCPOST Staff Reporter

Aug 16, 2013 06:28 PM EDT

According to Bank of America Corp. (BAC) about USD1.5 billion were added by investors into funds that purchase leveraged loans in the U.S.  In terms of assets, 60% were added due to the deposits received.  This information was obtained through a research report published by BAC.

The U.S. speculative grade bond funds suffered a decline of around 3% in assets.  An outflow of around USD420 million was recorded mostly from high yield exchange -traded funds.

Leveraged loans are a form of high-risk debt with ratings lower than Baa3 and BBB as appraised by Moody's Investors Service and Standard & Poor's, respectively.  Despite that, investors have put in deposits into loan funds for over a year.

Leveraged loans experienced a decline of 97.97 cents on the dollar from a high index of 98.88 cents last May 9 of this year.

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