Bloomberg.com – Junk-Debt ETFs Set Markets ’Abuzz’ After Record Trades
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 … A May 10 trade brokered by Cantor Fitzgerald LP at 2:42 p.m. in New York created about 4.5 million new shares in the PowerShares Senior Loan Portfolio (BKLN), Bloomberg data show. The trade, which fueled the highest daily volume for the 14-month- old $565.5 million fund, was valued at about $110.3 million. Earlier that day, an investor exchanged as much as 19.7 million shares in the SPDR Barclays Capital High Yield Bond ETF (JNK) for the equivalent of about $779.3 million in bonds, Bloomberg data show. The redemption, the biggest since the $11.2 billion fund was started four years ago, came after the investor had accumulated shares over several weeks, according to Knight Capital Group Inc., which brokered the trade.
Source: Bianco Research