Not even investors fleeing mutual funds that buy junk-rated U.S. corporate loans is enough to keep Cerberus Capital Management LP from tapping the market to finance its $9.2 billion bid for Safeway Inc.
Cerberus will begin raising $6.7 billion in loans today to fund its buyout of the grocer and merge it with Albertsons. Less than a week ago, mutual funds that invest in the debt posted their biggest withdrawals in almost three years, bringing redemptions since mid-April to more than $3 billion.
While small investors flee and U.S. regulators are stepping up pressure on banks to refrain from underwriting deals deemed too risky, those with the most at stake are plowing ahead in a market that has delivered returns of almost 100 percent since the end of 2008.
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