Merrill Lynch & Co. next month plans to bring to the market a $1 billion high-grade cash CDO, the Monterey CDO Ltd. Dynamic Credit Partners LLC, a New York-based privately held CDO and hedge fund manager, will manage the deal, which is backed by residential mortgage-backed securities and CDOs. The deal has a 22% bucket for CDOs and a 78% bucket for RMBS, and up to a 30% bucket for synthetic assets. The CDO will be the fourth for DCP, which was founded in 2003. The CDO will add to the $1.5 billion of existing CDOs under management at the firm. They include the $250 million Lenox deal, which is a CDO squared, the $1 billion Barrington CDO, backed by high-grade ABS and CDOs, and the $250 million Stockbridge deal, which is also a CDO squared.
National City Corp. formed a new structured products group within the firm's capital markets division. Timothy Yanoti joined as senior managing director and head of the structured products group while Peter McCarthy will be senior managing director and head of the mortgage capital markets group, which is part of the structured products group. Both will be based in New York. Yanoti and McCarthy both have more than 15 years of securitization experience. Yanoti was most recently in charge of global securitization at General Electric Capital while McCarthy was formerly head of mortgage trading and sales at GMAC Residential Funding Corp., where he oversaw the purchase and securitization of prime and subprime residential mortgages.