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Derivatives

MeesPierson Sells CDO To High-Net-Worth Clients

MeesPierson, the private banking arm of Fortis Bank, has sold a single-tranche collateralized debt obligation to its high-net-worth clients. Koen Zoutenbier, product development in Amsterdam, said it has sold EUR150 million (USD179 million) of the note to both advisory clients and discretionary accounts. It sells the CDO in chunks of EUR1,000.

Zoutenbier said it opted for a deal structured by the Royal Bank of Scotland because it was tailored for the retail market, both in terms of structure and reference entities. The deal has a three-year maturity. This suited MeesPierson's clients because they are looking to get out of long-dated bonds and earn a pick up in spreads. The note pays around 140 basis points over three-month Euribor.

The weighted-average rating of the reference portfolio is Baa1/Baa2, but the note itself is rated AA minus. There is a 3.6% first-loss tranche supporting this part of the CDO, explained Zoutenbier.

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