Pacific Investment Management Co. is looking at developing more hybrid synthetic managed collateralized debt obligations, following the introduction of its first two such products last month. An official at the firm in Newport Beach, Calif., said the U.S. manager launched the first CDOs in order to exploit favorable opportunities in pricing and the money manager is now considering making further launches for the same reasons. Potential products will be evaluated in view of their arbitrage gains. The official said the details as to when the firm may launch new products or what type of CDOs it is eyeing have not yet been decided.
Last month PIMCO introduced Channel, a USD1 billion synthetic CDO, which invested 90% in credit default swaps and 10% in cash bonds. The firm also introduced a USD120 million synthetic emerging market managed CDO (DW, 7/29).
