Hypo Real Estate Bank is looking to expand its CDO activities with possible sales hires, after closing its second CDO of CMBS two weeks ago. The firm, which was previously the commercial mortgage lending arm of HVB Group, placed the notes with investors with which the group has relationships. But, Gordon Black, director in London, said at some point it may have to hire one or two sales staffers to boost distribution. Its next issue is slated for the first quarter of next year.
The most recent CDO has a notional size of USD1.5 billion, and is a securitization of CMBS the firm holds on its books. "It effectively gave the bank another way to manage its risk," said Black. Issued through special-purpose vehicle Halcyon, it consists of three classes of notes, rated AAA, AA and BBB by Fitch Ratings, Aaa, Aa2 and Baa1 by Moody's Investors Service, and Standard & Poor's also assigned a AAA rating to the top class of notes.
