FleetBoston Financial is preparing to issue a USD1 billion collateralized debt obligation, according to DW sister publication BondWeek. It began marketing the transaction last week, said a sell-side banker and analysts who note the deal is being issued to tap strong demand for CDOs backed by senior secured corporate debt, which investors find attractive these days because they provide an extra layer of protection in an uncertain economic climate. On the flip side, CDOs of straight corporate debt have practically disappeared from the new issue market, with just one being sold all year, according to Elizabeth Russotto, a senior director at Fitch Ratings, who was not involved with the deal.
