Will Junk Mortgage Paper Sink The Bond Market?

At Bear Stearns Cos., a group of hedge-fund managers at the Wall Street firm spent the weekend scrambling to line up new investors or lenders to keep afloat their fund, called High Grade Structured Credit Strategies Enhanced Leverage fund. The fund, which invests in many securities that are backed by subprime mortgages, suffered heavy losses in recent months.

On Friday, credit-rating firm Moody’s Investors Service slashed ratings on 131 bonds backed by pools of speculative subprime mortgages. -WSJ