ABN AMRO recently closed a USD35 million equity portion of a single-tranche collateralized debt obligation in the Lion City. "We haven't seen equity buyers for a while, but these are becoming easier to trade and to delta hedge," said David Crammond, Asia-Pacific head of structured credit sales in Singapore. The structure is referenced to a pool of 100 U.S. and European names totaling USD1.2 billion (notional), offering a yield of LIBOR plus 1800 basis points. "This is an efficient way to take non-local credit risk," added Crammond. He continued that as such deals are hedged by the firm's trading books, the end user is able to easily trade into different credits if the need arises. The CDO is ABN's first in Singapore and follows up its recent deal in China (DW, 4/4).
ABN has two additional structures in the pipeline in the region, including a CDO of a CDO scheduled to close in the coming weeks, said Crammond.
