While it is well known that any good CDO roadshow should include a stop in Tokyo, bankers and issuers are tight-lipped about whom they are meeting with.

Now that Softbank Finance, along with TD Principal Finance, is in the market with a $250 million arb cashflow CDO-of-CDOs, the secret is out: asset manager Arsnova Capital Research is one of the larger players in Japan buying mezzanine CDOs. The three key members of the Arsnova team, Hirofumi Takeuchi, Hirotsugu Fujii and Toru Sakakibara, were involved in building and managing the CDO business for Sumitomo Life.

Arsnova Capital, founded in 2001, is majority owned by Softbank Finance (82.5%), Mitsui & Co. Ltd. (14.75%) and others (3.0%).

Project Pacific is offering its triple-A notes at Libor plus 65 basis points (22% of the $250 million notional). The only other visibly offered tranche is the single-A minus (11.5% of notional) piece, which was seen at Libor plus 150. Sixty percent of the deal is an A-2 class rated triple-A to return of principal only. The deals have a weighted average rating factor of 437 (Baa2/Baa3). Arsnova is planning to have the CDO-of-CDOs 60% ramped by closing and will be backed by CDOs rated: Baa (60%), Ba (7%), A to Aa (30%). The transaction's lead manager, TD Securities, could not be reached for comment.

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