Credit Suisse First Boston is entering into the business of issuing CDOs backed by trust-preferred securities (Trups), which will be overseen by CSFB's U.S. Structured Credit Products Group.
Trust-preferred securities allow institutions - primarily banks - to raise Tier I tax-deductible capital in the securities markets.
CSFB has joined forces with Trapeza Funding LLC, a professional money manager. Trapeza Funding LLC is a joint venture between Financial Stocks, Inc., a registered investment advisor, and Resource America, Inc., a financial services company, each with extensive experience in the small and mid-cap bank, thrift, insurance, and specialty finance sectors.
"We feel that combining Resource America's innovative asset management abilities with our years of experience analyzing community banks and thrifts is a real opportunity to create an unrivaled pool of community financial institutions," said Steven Stein, chairman of Financial Stocks, Inc. and a managing member of Trapeza, in a prepared release. "Partnering with CSFB enables Trapeza to combine its financial services industry experience with CSFB's international leadership in the CDO market. The result is a powerful and efficient funding source for small and mid-cap financial institutions."
To enhance sources of collateral for the program, CSFB and Trapeza have formed alliances with several regional investment banks and broker/dealers who have long-standing relationships in the community bank market.