Duff & Phelps obtains $1.19B credit line

CHICAGO (AP) — Duff & Phelps Investment Management Co., a unit of asset manager Virtus Investment Partners, said Monday it has obtained $1.19 billion in financing to help redeem auction rate and preferred securities.

Of the $1.19 billion, up to $900 million will be used for redemptions of DNP Select Income Fund Inc. The remaining $190 million will cover redemptions of Duff & Phelps Utility and Corporate Bond Trust Inc.

The auction-rate securities market involved investors buying and selling instruments that resembled corporate debt, except the interest rates were reset at regular auctions, some as frequently as once a week. A number of companies and retail clients invested in the securities because they could treat their holdings almost like cash.

The bond-like investments were widely held by many institutional and individual investors and were seen as highly liquid, money market-like investments. However the market for them collapsed early last year amid the downturn in the broader credit markets.

Duff & Phelps said it expects initial redemptions to begin this month, but it was unsure of the total amount or timing of redemptions.

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