John Hancock Funds is restructuring the holdings of a leveraged, closed-end fund.

John Hancock, Boston, a unit of Manulife Financial Corp., Boston, says the transactions have affected about $86 million in leverage at the John Hancock Investors Trust bond fund.

An outside commercial bank will provide a credit facility needed to redeem and replace 100% of the auction rate preferred securities in the fund, and to change the form of leverage from ARPS to debt.

John Hancock announced a similar, bigger transaction earlier this month.

John Hancock says it is making the moves in response to the failures in the market for auction rate preferred securities that have been occurring since February.

John Hancock is still working on the refinancing of the Income Securities Trust closed-end fund, the company says.

The trust has about $89 million in ARPS holdings.

Redemption of the ARPS holdings for the bond fund trust will be completed on a tranche-by-tranche basis, and it is anticipated that the redemptions will be completed in June, John Hancock says.