Several deals priced last week in the CDO market.
Of note, Lehman Brother's managed to bring HarborView CDO III in at levels below talk. Oppenheimer Funds is collateral manager on the $375 million multi-sector deal.
The deal was placed 50% in Europe, 25% US, and 25% in Asia, market sources said.
Talked initially at 50 over Libor on the triple-A's, the deal printed at 49 over, one basis point outside Credit Suisse First Boston's Solstice CDO for Rabobank. Solstice carries the torch for the tightest multi-sector CDO deal this year.
HarbourView III, however, was the best-priced double-A at 70 over Libor, with an 11-year average life.
Liberty Square, also brought by Lehman, had a +70/6ML print on March 2, 2001, but the average life was 8.80-years.
Another positive marketing feature for the CDO was that it was more than 80% funded by the pricing date, and that HarbourView is a seasoned investor in asset-backed securities. Furthermore, HarbourView is said to be taking 25% of the equity on its own books.
The assets backing the bonds are 16% home-equity, 14.5% CMBS, 10% RMBS, 9% manufactured housing, 7% REIT, 5% aircraft, <1% cat bonds, the rest being miscellaneous ABS transactions. The deal has a three-year non-call period and 12-year expected final maturity. About a week before launching, HarbourView upsized the deal by $25million.
Meanwhile, CLOs continue to dot the landscape. Eaton Vance Group is rumored to be readying a CLO via Bear Stearns.
CIBC World Markets continues to market the $300 million Nova CDO, backed 1/3 by senior secured loans and 2/3 high-yield bonds. Financial Security Assurance is providing a wrap. The manager, Phoenix Investment Counsel, is a subsidiary of Phoenix Home Life Insurance.
Lastly, Trust Company of the West is said to be readying the next in the GEM series, a $375 million emerging market CDO via Deutsche Bank. The assets backing the deal are reportedly 75% emerging market debt and 25% high-yield bonds. Deutsche Bank officials could not be reached for comment as of press time. Emerging market CDOs are continuing to make a comeback (see Ashmore profile, p.15).
TCW Group has an $80 billion portfolio of assets, of which $37.5 billion are fixed-income assets. The firm has 300 investment and administrative professionals.