Investors seeking to buy higher yielding, riskier slices of home-loan bonds sold yesterday by EverBank Financial Corp. were told they would have a better shot if they also purchased some of the AAA rated classes, showing weaker demand for the top-ranked debt, Bloomberg News reported yesterday. Bank of America Corp. and Barclays Plc, the underwriters of the deal, pushed investors to purchase the debt in a package as relative yields widen on AAA portions of securities tied to new mortgages without government backing. Greater demand for junior-ranked debt signals some investors are willing to take on the risk of homeowners defaulting on larger mortgages for higher returns. At the same time, rising spreads on the AAA debt as issuance accelerates may hamper the pace at which the U.S. government can scale back its role as it seeks to reduce the influence of mortgage guarantors Fannie Mae and Freddie Mac.
