Eaton Vance's new fund that invests in bank loans raises $600 million in IPO

By Sara Rosenberg

New York, Nov. 25 - Eaton Vance Corp.'s Senior Floating Rate Trust closed-end fund, which primarily invests in senior secured floating-rate bank loans, raised $600 million, exclusive of the underwriters' overallotments, with its initial public offering of 30 million common shares, according to a company news release.

In addition to the stock offering, the fund expects to use financial leverage - initially up to about 38% of gross assets - which if completed at anticipated levels, would bring total assets raised to about $1 billion.

"The floating-rate nature of senior loans can help reduce market value fluctuations that would normally occur with longer-term fixed-income investments as a result of interest rate volatility. With short-term interest rates at historic lows, many investors fear that the next trend in interest rates will be upward. This may be a prudent time for them to seek an investment vehicle that can benefit in a rising interest rate environment" said James B. Hawkes, chairman and chief executive officer of Eaton Vance, in the release.

The fund will be managed by vice presidents Scott Page, Payson Swaffield, and Craig P. Russ.

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