BofA Preps First Of Kind Loan CDO

Banc of America Securities is readying a synthetic single tranche collateralized debt obligation referencing a USD750 million portfolio of leveraged loans, which is thought to be the first deal of its kind.

  • 20 Aug 2004
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Banc of America Securities is readying a synthetic single tranche collateralized debt obligation referencing a USD750 million portfolio of leveraged loans, which is thought to be the first deal of its kind. Although synthetic collateralized loan obligations have already hit the market, these are more commonly created for banks wanting to hedge out the risk of their loan books, rather than being sourced from the market, and have thus far been full capital structure deals. Single tranche CDOs, meanwhile, have mainly comprised credit derivatives referencing bonds. Melissa Fox, spokeswoman at BofA in New York, declined comment.

One reason for the paucity of single-tranche portfolios referencing leveraged loans is it is harder to source loans for such structures because the leveraged loan market is markedly less liquid than the bond market. This also makes the tranches challenging to delta hedge, noted an official. It could not be determined how BofA is tackling this problem.

Rivals say the deal could be the first of many because credit derivatives referencing leveraged loans are generating a lot of buzz. Last year Credit Suisse First Boston launched the first synthetic index of leveraged loans in a bid to boost liquidity (DW, 10/20). BofA is thought to be in the final stages of structuring the deal, which is expected to come out in the next month.

  • 20 Aug 2004

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 358,291.38 1348 9.06%
2 JPMorgan 320,704.66 1461 8.11%
3 Bank of America Merrill Lynch 318,128.31 1104 8.04%
4 Goldman Sachs 236,643.87 789 5.98%
5 Barclays 231,197.41 895 5.84%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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  • Today
1 HSBC 35,007.57 165 6.53%
2 Deutsche Bank 34,880.53 120 6.51%
3 Bank of America Merrill Lynch 31,805.65 97 5.93%
4 BNP Paribas 27,920.60 169 5.21%
5 SG Corporate & Investment Banking 24,398.89 138 4.55%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 19,745.92 80 8.85%
2 Morgan Stanley 16,334.63 83 7.32%
3 Citi 15,972.34 95 7.16%
4 UBS 15,487.17 60 6.94%
5 Goldman Sachs 14,053.61 76 6.30%