Bank of America sold 230 billion yen ($2 billion) of global bonds on Friday, sources said, joining a handful of major banks that have sought to raise cash in Japan's stable credit markets.

The Bank of America deal takes the amount of bonds sold in Japan by foreign banks to more than $6 billion in the past week, with Citigroup, Deutsche Bank and Royal Bank of Scotland having all placed yen paper.

Financial firms in the United States and Europe have struggled to raise funds as banks make room for their commitments to the troubled asset-backed commercial paper (ABCP) market, which has been shunned by investors worried about U.S. subprime mortgages.

British mortgage lender Northern Rock highlighted the difficulties some institutions face, obtaining an emergency loan from the Bank of England after having run into trouble raising funds for its assets in the money markets.

The scramble for funds has sent money market rates soaring and has prompted big banks to turn to Japan, with market players saying the funds were almost certainly being swapped back into dollars, euros or pounds from the yen.

The Japanese market is clearly one of places where U.S. and European banks want to raise funds now, said Tetsuya Miura, a bond strategist at Shinko Securities.

Japanese players have a lot of money in their hands, and their tolerance for risk is bigger as they are less hurt by the global credit squeeze than players elsewhere.

Japan's markets have been little impacted by the problems elsewhere as its banks and financial institutions hold few U.S. subprime mortgages and were not involved in ABCP or related structured investment vehicles.

Bank of America sold the five-year, floating-rate bonds at a spread of 45 basis points over LIBOR, the exact same spread as in the floating-rate bonds sold by Citigroup, Deutsche Bank and RBS.

The lead managers on the deal were Bank of America Securities and Mizuho International.

($1=114.98 Yen)

Investment Citigroup Bank of america Deutsche Bank