Investors withdrew $766 million from U.S. funds that buy high-yield bonds in the past week, the second straight outflow, according to data provider Lipper.
The pullback brings net outflows for the funds to $9.7 billion this year, the data show. Investors also pulled $342 million from U.S. leveraged loan funds, the ninth straight weekly outflow, according to Lipper.
Individual investors are souring on high-yield bonds and leveraged loans at the same time that offerings are picking up. Companies this month have sold more than $19 billion of junk bonds in the U.S. after issuing just $3.5 billion in August, data compiled by Bloomberg show. Burger King Worldwide Inc. is also seeking the biggest single term loan for an acquisition by a speculative-grade borrower since 2007.
Net withdrawals for loan funds have risen to $4.7 billion this year, Lipper data show. That compares with a record $62.9 billion deposited last year into the mutual funds and exchange traded funds that buy the riskier corporate debt.
Junk bonds have lost 0.9 percent this month after gaining 1.52 percent in August, according to Bank of America Merrill Lynch index data. Loans have declined 0.34 percent in September, after returning 0.24 percent in August, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 Index.
Burger King will meet with lenders next week to discuss a $6.75 billion term loan backing its purchase of Tim Hortons Inc., said a person with knowledge of the deal, who asked not to be identified citing a lack of authorization to speak publicly. A portion of the deal is also expected to be financed with notes, according to a regulatory filing.
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