Bloomberg – Citadel Investment Group LLC will formally open its credit business next month as the $13.5 billion hedge fund founded by Ken Griffin expands into the market for leveraged loans and high-yield, high-risk bonds.

The new group, part of its Citadel Securities division, will be based in New York, according to Peter Santoro, head of institutional markets for the unit.

The Chicago-based firm is setting up the sales and trading platform as part of a larger push into investment banking. The move follows the loss of Lehman Brothers Holdings Inc.,Merrill Lynch & Co. and Wachovia Corp. during the financial crisis, which eliminated trading partners and debt underwriters.

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Tags: hedge fund, institutional markets, lehman brothers, leveraged-loans