Deals
Dealers Absorbing Junk Bonds as ETF Demand Drops: Credit Markets
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Wall Street banks are expanding holdings of speculative-grade bonds as prices fall from record highs with investors retreating from exchange-traded funds that buy the debt.
The 21 primary dealers that do business with the Federal Reserve increased their net positions in junk-rated debt by 37 percent to $7.7 billion in the two weeks ended May 15, the highest since the central bank started reporting more detailed holdings data for the period ended April 3. U.S. high-yield funds reported $400 million of withdrawals last week, the second-most this year, led by $520 million pulled from ETFs, according to Bank of America Corp.