Triton Partners is preparing its fifth and most innovative CBO.
The latest transaction will be between $200 million and $300 million in size, and will be placed via Morgan Stanley Dean Witter.
The deal will be backed by high yield bonds, with limited emerging market credits, according to market sources. Triton has done four deals and has $1.5b billion under management.
Last week, Reich & Tang priced its $430 million GIA Capital Advisors CDO, with Credit Suisse First Boston at the helm.
Conduits lapped up this investment grade CDO, particularly the triple-A tranche, which came at +46/6ML on a wrapped basis. CSFB claims the transaction is the tightest pricing on a triple-A CDO tranche so far this year.
Despite a 10% emerging market exposure, investors were still tickled that the deal was triple-A on a stand-alone basis and had a wrap to boot. CSFB was reportedly very open to showing investors what credits where going into the deal.
It's understood that Korean Development Bank, Pan American Beverages, and PDVSA are in the portfolio.
The top two largest asset concentrations are wire-line telecom at about 6% and utilities at about 6% to 7%, both of which have cheapened up recently. Average rating of this deal, which is 95% ramped up, is triple-B.
The rating agencies have set a maximum of 10% for double-B credits, but currently the deal has about 5% double-B bonds in order to provide room for potential downgrades.