An upswing in interest for synthetic emerging market collateralized debt obligations fueled an estimated EUR700 million in rated deals issued in the second half of last year, said officials at Moody's Investors Service's European Structured Finance Conference two weeks ago. Florence Tadjeddine, v.p. and senior analyst at Moody's, said spread arbitrage opportunities in the asset class attracted dealers structuring single-tranche, full capital structure, static and managed transactions.
Demand is tipped to continue on the back of improved liquidity in emerging market credit-default swaps and investor requests to diversify out of corporate credit. "We expect more to come this year," Tadjeddine noted. Firms who issued large deals last year include Calyon with Washington Square Investment Management, Goldman Sachs with PIMCO Europe, ING Capital Markets and Citigroup.
