Bidders Sought for $8.2 Billion of Asset-Backed Debt, BofA Says

Investors are being asked to bid for $8.2 billion of U.S. and European asset-backed securities in an auction today, according to Bank of America Corp.

A total of 647 senior ranking and so-called mezzanine portions of the debt will be available for purchase, analysts led by Alexander Batchvarov wrote in a note to clients. The debt includes securities backed by U.S home loans, European commercial real estate and collateralized debt obligations, according to the note.

Asset-backed bonds pool income from loans into notes of differing risk and returns. The lowest-rated portions pay the highest coupons because they are first in line to absorb losses from defaults in the underlying portfolio.

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