The leveraged closed-end funds that issued auction-rate securities are facing a rising risk of being forced to de-lever, according to a report from Moody’s Investors Service. The report concludes, however, that the heightened de-leveraging risk alone should not pressure the corporate ratings of many of the affected asset managers.

For the vast majority of firms, closed-end funds represent a small percentage of their overall business. However, Moody’s warns that the ARS overhang threatens to have secondary implications for entire fund families if managers cannot ultimately resolve the issues.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.