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UBS Debuts Rated Equity Tranche

UBS is marketing globally its first public investment-grade rated equity tranche.

UBS is marketing globally its first public investment-grade rated equity tranche. Pramerica Financial, the international division of U.S.-based Prudential Financial, is managing the deal, which is called Dryden 17 for Pramerica's synthetic collateralized debt obligation series. It is Pramerica's first rated equity trade under management.

An official familiar with the offering said it combines equity and mezzanine tranches and has been designed this way to appeal to both European investors, who prefer equity, and U.S. investors, who prefer mezzanine. It will consist of credit-default swaps on primarily investment-grade corporate credits and will be issued in U.S. dollars, euros, sterling and Swiss francs. It is expected it to close in January.

UBS also reportedly is in the market with a static rated equity deal. Structured credit officials at the firm declined comment. Citigroup and Credaris, and Deutsche Bank and Cheyne Capital Management are marketing combined equity and mezz deals (DW, 10/23).

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