There are worrying signs that the panic in the debt market is spreading to the top

Cracks are beginning to appear in the bond market.

Investors last week pulled billions from funds investing in high-quality bonds issued by US companies, according to a report from Bank of America Merrill Lynch.

That comes after panic hit the market for lower-grade, riskier debt this month.

Investors headed for the exits as interest rates increased, with at least two junk-bond funds, Lucidus Capital Partners and Third Avenue Focused Credit, closing their doors as a result.

The panic seems to have spread from junk to debt issued by companies with high credit ratings.

Around $3.5 billion (£2.35 billion) was withdrawn from investment-grade bond funds last week, according to BAML analysts led by Michael Hartnett. That's the most in 17 weeks, and the worst showing since August.

Here's how that chart looks:

In all, bond funds saw $25 billion in outflows in the past three weeks, concentrated in corporate credit and debt issued in emerging markets.