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Derivatives

RBS Plans First Managed CDO

The Royal Bank of Scotland Financial Markets will bring its first managed collateralized debt obligation to the market this quarter. The EUR1 billion (USD981.8 million) CDO will be managed by a large European fund manager, according to David Littlewood, global co-head of the structured credit products group in London. He declined to provide further details.

The bulk of the CDO transactions RBS has structured since 1999 have been private. Littlewood said that firm, however, has already done some large public synthetic balance sheet and arbitrage CDOs and that launching managed transactions is the next logical step. He added that the firm has seen demand from investors for managed deals. The eventual goal will be to do repeat managed deals with a variety of fund managers, Littlewood noted.

The deal follows the setting up of a new structured credit products group to develop its CDO franchise and focus more on the public managed synthetic CDO market in Europe. RBS named Littlewood and David Henriques as co-heads of the group in London. Previously they were co-heads of the risk finance group.

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