Robeco plans to attract Dutch pension funds to its latest collateralized debt obligation by linking some of the notes to European inflation. Erik van Leeuwen, v.p. and CDO manager in Rotterdam, the Netherlands, said the AAA tranche of CDOs is now the hardest tranche to sell so it is offering the notes with inflation or in fixed and floating form.
The novel feature is part of its Robeco VII transaction, which will likely price in April. In addition, it plans to shift some of the AAA tranche to retail investors. The asset manager will structure notes, dubbed combination notes, which have AAA and mezzanine notes and a slice of the equity tranche. The principal on these notes is rated A2 by Moody's Investors Service and will pay a coupon of around 6.5-7%, said van Leeuwen.
