BOSTON, April 11 (Reuters) - U.S. money manager Eaton Vance Corp (EV.N: Quote, Profile, Research) said on Friday four of its closed-end funds are collectively redeeming about $1.1 billion of auction-rate preferred shares they have issued and replacing the leverage with debt.

Eaton Vance is the third-biggest closed-end fund firm. The funds issue the preferred shares to borrow and boost returns. But the credit crunch has disrupted the market for these securities and rendered them illiquid.

Bowing to pressure from the holders of these shares, Eaton Vance and other closed-end fund issuers such as Nuveen Investments and BlackRock Inc (BLK.N: Quote, Profile, Research) are looking at ways to redeem the securities and refinance the leverage.

Nuveen is the biggest closed-end fund firm while BlackRock is the second-biggest.

The low interest-rate environment is helping taxable funds switch their means of leverage to debt from preferred shares.

Eaton Vance had announced in March redemptions of $1.6 billion of preferred shares. After Friday's announcement, it will have to figure out how to handle the remaining $2.3 billion of these securities issued by its closed-end funds.

Eaton Vance said in a statement the arrangements for the new financing have been entered into by the four taxable funds and not by the company. The deal will help the funds redeem about two-thirds of their outstanding preferred shares and it is examining ways to help them redeem the rest, it said.

Eaton Vance shares closed down 2.2 percent at $31.05 on Friday ahead of the announcement versus a 1.8 percent decline in the S&P asset management and custody banks index . (Reporting by Muralikumar Anantharaman; Editing by Tim Dobbyn)