Last week, Lehman Brothers brought to market a US$57.5 million, arbitrage synthetic CDO, Golden Jade CDO, with the Agricultural Bank of China acting as portfolio manager. This transaction represents a growing trend in non-Japan Asia, where the managed arbitrage synthetic CDO sector is becoming increasingly active.
The synthetic CDO market has been pretty active in Asia this year, confirms Jerome Cheng, vice president in the structured finance group at Moody's Investors Service in Hong Kong. "This year we have already rated four synthetic CDO deals, including Artemus arranged by HVB, two transactions arranged by Lehman Brothers, Ruby Finance and Golden Jade, as well as Merlion, arranged by JPMorgan Securities and DBS Bank in Singapore." It's expected that there will be at least the same amount of deals issued this year.