The reduction represents a halving of the debt for the High-Grade Structured Credit Strategies Enhanced Leverage Fund from the $1.2 billion that it was revealed to owe on June 26th.
Bear Stearns has achieved the cut through sales of the fund's assets, according to a report in the Wall Street Journal.
News of the development comes after the New York-based bank announced that it had earmarked $1.6 billion to rescue the High Grade Structured Fund Credit Leveraged Fund, while the High Grade Structured Credit Strategies Fund is to be wound down.
Both funds had made substantial losses through a series a wrong-way bets on securities tied to sub-prime mortgage bonds.
Last week the firm announced it is tightening risk controls at its asset management division in response to the funds' losses.