The summer's visible trust preferred securities backed CDO pipeline has just about cleared out, especially now that two separately marketed deals were combined to form one vehicle, which priced last week.

The two deals - formerly Tropic CDO and MM Community Funding IV - brought together the banking teams of Bear Stearns (Tropic deal), Salomon Smith Barney and Sandler O'neil (previously joints on the MMCF issue) to form Trust Preferred Funding (T-PREF).

Salomon and Bear were joint-books on the $581.9 million T-PREF offering. T-PREF reportedly brought together two pools of trust preferred securities in order to improve the diversity of the transaction. Bankers report that trust preferred securities that meet rating agency requirements for regional diversification are difficult to source, although the East Coast (Region One) collateral is reportedly easier to acquire. "It's easier to find a bank in Connecticut willing to sell you collateral than one in South Dakota," noted a rating agency official. Sources speculate that the Tropic deal from Bear was weighted toward Region One, so teaming up with Salomon and Sandler was a way to improve the diversity of the pool.

The 30-year tenor deal had two triple-A classes that priced at 90 basis points over three-month Libor and 95 basis points over three-month Libor, respectively. The consolidated Bear Tropic Trust Preferred CDO I was slated as a $307 million issue with a 13.3-year average life, and the triple-A class was talked at 95 basis points area over Libor.

Meanwhile, FTN Financial Capital Markets and Keefe, Bruyette & Woods priced their $500 million Preferred Term Securities VI in mid June. It is rumored that CSFB hopes to bring an inaugural TRUPS CDO sometime in July, if it is able to source the collateral.

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