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Floating-rate fund raises $322.5 million in IPO
By Sara Rosenberg
New York, Oct. 29 - The new Floating Rate Income Strategies Fund Inc., which expects to invest a substantial portion of its funds in non-investment grade senior floating-rate loans, raised $322.5 million through an initial public offering of 16.125 million shares of common stock, according to a filing with the Securities and Exchange Commission. Merrill Lynch & Co., Wachovia Securities, McDonald Investments Inc. and SunTrust Robinson Humphrey are the underwriters.
The fund expects to focus on bank loans with Ba/BB or lower ratings, however, it may not invest more than 10% of its total assets in securities and instruments that are rated Caa1 or lower or CCC+ or lower.
Furthermore, the fund may leverage through borrowings, issuance of debt securities, issuance of preferred stock or a combination. Currently the fund plans to borrow money up to approximately 30% of the value of its total assets, the filing said.
The fund will be managed by Kevin Booth and Joseph P. Matteo of Merrill Lynch Investment Management.
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