BlackRock Writes In Flexibility For USD500M CDO

BlackRock has structured a USD500 million commercial real estate collateralized debt obligation with considerable flexibility during the ramp up and reinvestment period.

  • 04 Aug 2006
Email a colleague
Request a PDF

BlackRock has structured a USD500 million commercial real estate collateralized debt obligation with considerable flexibility during the ramp up and reinvestment period. According to sister publication Real Estate Finance and Investment, Kimberlite CDO I is the first to allow a manager to replace credit-default swaps with total-return swaps during the reinvestment period. In addition, the transaction, which has a 90% synthetic concentration, has unfunded and funded liabilities, which also gives BlackRock additional flexibility. BlackRock did not return calls.

The CDO will include a USD333.5 million unfunded super senior class with Wachovia as the swap counterparty. It will also issue approximately USD166.5 million of funded notes and funded subordinated notes that reference a USD500 million portfolio of BBB- and BB-rated cash CMBS bonds. Kimberlite is among the few to reference a portfolio of lower-rated securities to take advantage of the growing number of credit intensive investors, including hedge funds. UBS and its asset management subsidiary Dillon Read Capital Management are marketing a similar offering, a USD1 billion private deal, DRCM CMBS CDO 2006-1 (DW, 7/21).

BlackRock may have elected to replace CDS for TRS to take advantage of the variance in pricing for the swaps, market participants speculated. Kimberlite also has a larger-than-usual reserve pool set aside and liquidity facilities in place that can be funded or unfunded on day one. Reserve pools are funded on a deal-by-deal basis with attachment and detachment points, which help a manager to determine when CDS and TRS are settled. Attachment and detachment points are being tailored based on a deal's capital structure and other factors, including losses and spread triggers, market participants added.

  • 04 Aug 2006

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 329,208.56 1277 8.09%
2 JPMorgan 321,584.64 1392 7.90%
3 Bank of America Merrill Lynch 296,878.25 1014 7.29%
4 Barclays 249,463.73 926 6.13%
5 Goldman Sachs 218,838.41 733 5.38%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 46,136.68 182 7.00%
2 JPMorgan 44,545.29 93 6.76%
3 UniCredit 35,639.50 153 5.41%
4 Credit Agricole CIB 33,211.72 160 5.04%
5 SG Corporate & Investment Banking 32,419.80 126 4.92%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 13,755.50 61 8.94%
2 Goldman Sachs 13,469.15 66 8.76%
3 Citi 9,716.40 55 6.32%
4 Morgan Stanley 8,471.86 53 5.51%
5 UBS 8,248.12 34 5.36%