Australia’s largest securities firm, Macquarie Bank Ltd., said investors in some of its high-yield funds may lose as much as 25% of their money amid the fallout in American subprime mortgages. The bank’s stock slumped.

Macquarie Fortress Investments Ltd. was forced to sell assets and use the proceeds to reduce borrowings and comply with lending covenants, it said in a statement. Investors in notes from Sydney-based Fortress may lose A$300 million ($255 million), the Australian newspaper reported earlier. Macquarie joins Australian hedge funds Absolute Capital Group Ltd. and Basis Capital Fund Management Ltd., and New York- based Bear Stearns Cos. in suffering from the widening impact of delinquencies on American home loans to people with poor credit. Funds like Fortress, with loans to people with good credit, are losing value as buyers flee the debt market.

“The concern is that the contagion looks like it’s spreading and some of the bigger names are now being dragged in,” an executive who helps manage the equivalent of $83 billion at AMP Capital Investors in Sydney, Shane Oliver, said.

Macquarie Fortress stock slumped 20% to 60 Australian cents at 10:07 a.m. in Sydney today. The bank’s shares declined 5.5% to A$78.00

The Fortress funds don’t have direct investments in American subprime mortgages. Instead, they have bought senior secured American corporate loans.

“There have been no defaults in the portfolio and no reason to believe that the loans will not continue to pay their interest and repay principal,” a director of Macquarie Fortress, Peter Lucas, said in the statement.

Bear Stearns, manager of two hedge funds that collapsed last month, halted redemptions from a third fund after a slump in credit markets prompted investors to demand their money back. The Bear Stearns Asset-Backed Securities Fund had about $900 million invested in asset-backed securities, including mortgage bonds, spokesman Russell Sherman said today.