Morgan Stanley has issued its first three single-tranche mezzanine notes referenced to Synthetic TRACERS, its U.S. 100-name credit-default swap index. Matthew Zola, managing director and co-head of structured credit products in New York, said the structures were traded as a means of promoting flow in the index. In a generally low spread, low interest rate environment, investors are looking for ways to hit their yield targets and relative to other instruments such as corporate bonds, structured mezzanine tranches look attractive, he noted.
Zola said the firm is seeing interest for the notes from protection sellers as diverse as hedge funds, banks, insurers, reinsurers and money managers.
