Investcorp.'s $500 million collateralized fund obligation (CFO), backed by hedge-fund returns, is expected to wind up its global roadshow this week and underwriter Credit Suisse First Boston will potentially release price talk in mid-April.
Since most of the equity in the Diversified Strategies deal is being placed with Investcorp. and its contacts in the Middle East, CSFB's biggest challenge has been placing the debt. The bank has reportedly presented the transaction to virtually every fixed-income/hedge fund investor in the firm's rolodex and the bankers are pretty worn out. Investors report that CSFB has told them the triple-A levels will be greater than recent CDOs, which could be 55-70 basis points over Libor. Diversified Strategies is not expected to have a monoline wrap.