Leading CDO underwriter Merrill Lynch is bringing the inaugural CDO for a unit of New York-based Maxim Group LLC in the coming weeks, a $753 million high-grade structured finance deal, named Jupiter CDO I, sources reported. The transaction is expected to price before the end of October, with settlement in November.

The deal's structure consists of two triple-A rated senior classes - $603.75 million of 5.5-year A1 and $82.5 million of eight-year A2 notes. Additionally, Maxim is offering $42.75 million of eight-year double-A and $12.75 million of triple-B rated B and C notes. Preferred shares total $11.5 million.

The bulk of the collateral - 45% - is an equal mix of triple-A rated ABS CDO product and double- and single-A rated subprime MBS. The next greatest concentrations are triple-A rated RMBS and double-A rated ABS CDO product, which collectively make up 40%. The remaining 15% is split equally between triple-A rated subprime MBS, double-A rated "other" ABS product and triple- and double-A rated corporate synthetic CDO collateral.

The maximum allowable single-issuer concentration is set at 2%, with a minimum of 95 different obligors. CDO collateral is limited to 50% of the pool. The minimum rating for CDO collateral is in the single-A minus range.

Roughly 75% of the collateral has been purchased, with the remaining 25% to be purchased within 90 days of closing. Collateral manager Maxim Advisory LLC will collect fees totaling 15 basis points per year, 10 of which are senior in the payment waterfall.

Sources anticipate at least one more offering before year-end and anticipate Maxim could be a quarterly issuer going forward. Maxim, a relatively new name to fixed-income markets, operates as a broker/dealer, asset manager and advisor and investment bank. Maxim also offers institutional sales, equity research and insurance products.

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