CDC IXIS Capital Markets is gearing up to offer a yen-denominated collateralized fund obligation in Japan in the coming weeks. Fabien Labouret, Asian head of structured alternative investments in Tokyo, said the French bank will structure a USD150 million yen CFO linked to a domestic long/short fund and will be distributed in tranches.
"Dynamic hedging will be used for senior note holders," said Labouret, explaining that for the senior tranche, which will be capital protected, CDC will adjust its exposure to the fund and to risk-free U.S. Treasuries pending market movements. The equity portion will be sold to the underlying fund's investors who want leveraged exposure. It has not yet been decided if the mezzanine tranche will be distributed or hedged. The maturity of the notes will likely be five years.
