Strong Capital Management, a well regarded Wisconsin-based mutual fund company, last week printed their third high-yield CDO, called Forde, via lead manager Merrill Lynch.
While the $300 million cashflow high-yield bond deal is "substantially" ramped-up, the transaction is expected to be fully funded by the closing in order to lock-in the arbitrage.
Like many mutual funds, Strong's main focus is to build-up its assets under management, securing lucrative fees, and leveraging the firm's team, which runs existing public HY mutual funds.
Jeff Koch and Tom Price are credited for building Strong's high-yield franchise and are actively involved in Forde.
Forde was understood to have had a global distribution, including buyers from the U.S., Canada, Europe and Asia. European investors were most interested in the A class tranches. The mezzanine buyers were largely U.S. shops. Although Asian buysiders have shied away from equity participation in CDOs of late, the deal is said to have found some equity participants in the Far East. Asian CDO equity buyers seem to be coming back into the fray, commented one source.