By Lisa Abramowicz - May 17, 2012 12:22 PM PT
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QUEUE
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The biggest trades on record in shares of two exchange-traded funds that invest in junk debt are attracting attention to the four-year-old market that allows anyone from banks to retirees fast and discreet access to speculative-grade bonds and loans.
The transactions were completed hours before JPMorgan Chase & Co. disclosed $2 billion of trading losses tied to credit derivatives, an announcement that has heightened attention on big trades in debt markets.
Shares of an Invesco Ltd. ETF that invests in leveraged loans had a record one-day inflow on May 10 that boosted its shares outstanding by 25 percent, according to data compiled by Bloomberg. The same day, an investor used State Street Corp. (STT)’s ETF of junk bonds to anonymously obtain as much as $780 million of the debt by swapping shares of the fund.
“Markets are abuzz” over the State Street ETF trade that allowed an unidentified investor to avoid moving prices in the privately negotiated debt market, New York-based CreditSights Inc. analysts Chris Taggert and Nathan Wenger wrote in a report today.
Investors including TF Market Advisors and Pacific Asset Management speculate that the two trades last week are related.
JPMorgan, which said its losses stemmed from trades done by its
http://www.bloomberg.com/news/2012-05-17/state-street-s-junk-etf-sees-biggest-redemptions-since-07.html
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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