loan participation fund definition

loan participation fund

Mutual fund that invests in loans with higher-than-normal interest rates, made usually to stable and successful firms that have low credit-ratings because of their age, industry, or other factors. Although such loans are not investment-grade, they are secured by the firm's assets, and therefore are of higher quality than the junk bonds. Due to their high interest earnings, loan participation funds are able to offer higher-yields than the investment-grade funds. Also called floating rate fund.

loan participation fund is in the Investing and Securities & Futures Trading subjects.

loan participation fund appears in the definitions of the following terms: floating rate fund and investment grade fund

This content can be found on the following page:

http://www.businessdictionary.com/definition/loan-participation-fund.html