Morgan Stanley placed a $1.58 billion static cashflow investment-grade CBO last Wednesday for GE Asset Management. The super-senior, four-year unwrapped triple-As came in at a tight 42 basis points over one-month Libor.
The use of super senior triple-A tranches allowed GE to get a cheaper cost of funding, sources said. The structure, which provides extra subordination for the triple-As, is becoming popular this fall, perhaps an indication of the difficulty of selling triple-A notes without a wrap. Also, as dealers continue to merge their derivatives and CDO groups, expertise in super senior structuring is becoming readily available, commented a banker with a super senior cashflow CDO in the market.