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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