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Thursday, Mar 28, 2024

Banks Creating Fund to Help Lower Debt

Three large investment banks, all of which are active in the Valley, announced Monday that they would create a large fund to serve as a buyer of debt that includes bonds in an effort to help SIVs, or structured investment vehicles, sell securities, the New York Times reported. Citigroup, Bank of America and JP Morgan Chase will develop a fund that will purchase about $75 billion to $100 billion in highly rated debt, the Times reported. SIVs have had trouble finding financing since the drastic credit woes beginning in August. The fund, called a conduit, will not purchase bonds tied to subprime mortgages. Instead, it will focus on buying debt with a high rate of return, such as those backed by other mortgages, credit card receipts and other assets, the Times reported.

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