Halcyon Asset Management is co-marketing a first-of-a-kind long-short collateralized debt obligation with Deutsche Bank, which structured the deal. The USD450 million CDO consists of long positions in senior secured bank loans and short positions in corporate credit-default swaps, and is designed to benefit from spread widening or default. Halcyon LSSU is the tentative name of the deal, standing for long senior, short unsecured.
Halcyon is keeping most of the equity on its books and Deutsche Bank is marketing the rest of the deal to foreign--mostly European--institutional investors. It is expected to price this month and be followed immediately with another USD450 million deal.
Steve Mandis, portfolio manager on the deal at Halcyon, was on vacation andMichael Herzig, managing director and co-head of Deutsche Bank's CDO group in New York, declined all comment ahead of its close.
