Shadow Lenders Hit Hardest By Pandemic Surge on Fed Lifeline

Some of the hardest-hit parts of the financial world are finally getting a boost after the Federal Reserve expanded its unprecedented support of credit markets to include the debt of riskier borrowers.

Real estate investment trusts that buy private mortgage bonds, business development companies that lend to small or highly leveraged companies and funds that hold some of the riskiest types of complex debt all surged on Thursday.

The central bank, which until today had limited its stimulus efforts to investment-grade corporate debt and only the safest of mortgage-related securities, unleashed its most potent wave of stimulus as it seeks ...