SunTrust, an Atlanta-based regional bank that still has to pay back US funds, said in a statement that it will sell about $17 billion in money market mutual fund assets to Federated Investors.

Federated, which has about $350 billion in assets under management, said it would also acquire certain assets maintained by SunTrust in collective and common funds. The deal is expected to occur through a series of closings by year-end.

SunTrust will retain RidgeWorth Capital Management's long-term asset management business.

RidgeWorth and its boutiques collectively managed $65.1 billion in assets as of 31 March. SunTrust had more than $211 billion in assets under advisement, including $122.7 billion in assets under management as of the same data. SunTrust Banks, headquartered in Atlanta, had total deposits of $118.8 billion on 31 March. The firm is due to issue updated financial results later in July.