First Union recently launched Apex CDO I 2000-1, the latest in a string of collateralized debt obligations brought to market by the bank over the last few months. According to a source, the deal priced a few weeks back and should close on Tuesday, though First Union declined to comment.
Unlike recent deals via First Union - such as St. George Funding or Special Value Bond Fund II - First Union is also collateral manager on the Apex deal, through an in-house shop called First Union Institutional Debt Management.
Apex is the second CDO this year managed by FUIDM, and is apparently the successor to the ELC line, from which First Union has launched six deals since 1998, all managed by FUIDM.
Apex, worth approximately $800 million and offered in three parts, will be backed by high yield bonds. According to published reports, a $687 million, triple-A-rated A class launched at three-month Libor plus 41, while a $33 million, single-A-rated B class launched at three-month Libor plus 130. A third, $78 million, triple-B-rated C class launched at 275 over the same benchmark.
FUIDM's last deal, ELC 2000-1, priced in May and was worth roughly $470 million.
In other CDO news, it's rumored that CIBC World Bank is putting together a $1 billion collateralized bond obligation called Caravelle II. The market value CBO is expected to close in late October.
Meanwhile, several CDO's were hit by the ratings agencies last week.
Moody's Investors Service downgraded two classes of Aeltus CBO, while placing two classes ML CLO XII Pilgrim America and one class from ML CLO XX Pilgrim America on review for a possible downgrade.
Further, Moody's placed two classes of Putnam CBO I on review for possible downgrade. According to a press release, both classes of notes had been downgraded once already, in fall of 1999.
According to a source at Moody's, the three rating events were independent of each other.