Metropolitan Life (Met Life) has launched and priced its first investment-grade a $507 million cash flow CBO called Madison Avenue II, via Salomon Smith Barney. The $415 million triple-A rated tranche priced at 48 basis points over six months libor. Although the A-class priced at par, several investors believed the collateral was far too leveraged. Moody's Investors Service and Standard & Poor's rated the transaction.
Madison II has a 5% equity first-loss piece compared to a typical high-yield CBO with a 10% cushion.