Bank of America Corp. and several other financial institutions have agreed to launch a fund to buy illiquid assets in exchange for new short-term debt.
Charlotte-based BofA (NYSE:BAC), Citigroup Inc. (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM) have agreed to create a single master liquidity enhancement conduit to purchase assets from structured investment vehicles, according to a BofA press release.
Access to such liquidity will allow sellers to meet pending redemptions and facilitate asset-backed commercial paper rollovers, BofA says.
According to The Wall Street Journal, the banks hope to have the $100 billion fund up and running within 90 days.
The U.S. Department of Treasury facilitated the discussions among the consortium of banks and investment managers. The fund is widely seen as a method to prop up the troubled credit markets.
credited by: bizjournals.com
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