The EUR325 million CDO, called Palladium, offers AAA to BBB-rated notes linked to a portfolio of predominately investment-grade U.S. corporates, with a spattering of emerging-market sovereign exposures. BlackRock will manage the portfolio throughout the life of the seven-year trade and has the ability to short up to 10% of the underlying. Officials from BlackRock in New York did not return calls by press time.
Palladium is expected to be priced next week and is being marketed in Asia and Europe to banks, insurance companies and funds. Notes will be issued in euros, U.S. dollars or yen. "We expect a first issuance mid February followed by taps," Christen said.