CHARLOTTE, N.C. - Bank of America Corp. will waive or compensate investors for the fees for loan trades on which the banking company is not the agent, Ed Hamilton, head of loan trading, said Thursday.
The company has been waiving assignment fees on deals for which it is the agent for a number of years, but it decided to take the practice to the next level because "we want to promote liquidity in the market," Mr. Hamilton said.
The change stemmed from requests by investors, he said.
Bank of America is not eliminating the assignment fees from the credit documentation, and the waiver will only apply to trades made through the company's trading desk, he said.
The change in policy will cost Bank of America less than $25 million, Mr. Hamilton said.
Credit Suisse First Boston, Deutsche Bank, Morgan Stanley Dean Witter & Co. and UBS Warburg have taken similar actions.
These companies have been trying to pressure Bank of America and J.P. Morgan Chase & Co., the two biggest competitors in loan trading, to drop the fees as well by claiming the move would create more liquidity in the secondary market.
Morgan Chase has not changed its fees.
