The San Francisco-based headquarters of Barclays Global Investors, a global institutional investment firm with more than USD800 billion in assets, is planning to manage its first synthetic collateralized debt obligation, according to a firm official. BGI's first deal is expected to hit the market within the next two months.
"We've been wrapped up in negotiations with a number of banks for several weeks," the official said. He declined to name banks BGI is speaking with or if one had already been chosen to structure the deal. One CDO analyst in New York said BGI has been in talks with a number of firms, including Bear Stearns and Goldman Sachs. Officials at the firms declined comment.
The CDO analyst said the firm's first managed deal would likely be between USD500 million-USD1 billion and referenced to a portfolio of about 20-30 U.S. credits. "BGI is well aware of the growth of the synthetic market in the U.S., that's why it's getting into it now," the analyst said. The BGI official declined to comment on the deal. The analyst said investors would be able to buy into the deal through an equity tranche, mezzanine notes or a super senior credit-default swap.
