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UBS, Dillon Read Offer Hybrid CMBS CDO

20 Jul 2006

UBS and its wholly-owned alternative asset management subsidiary Dillon Read Capital Management are marketing globally their first hybrid commercial mortgage-backed securities collateralized debt obligation.

UBS and its wholly-owned alternative asset management subsidiary Dillon Read Capital Management are marketing globally their first hybrid commercial mortgage-backed securities collateralized debt obligation. The USD1 billion private deal, called DRCM CMBS CDO 2006-1, contains 65% credit-default swaps referencing CMBS and the rest in cash securities. Indicative pricing could not be determined by press time.

DRCM launched earlier this year and absorbed the investment bank's principal finance, credit arbitrage and commercial real estate businesses. Officials at the unit are unable to comment on deals while DRCM registers as a third-party investment advisor with the Securities and Exchange Commission.Jim Stehli, managing director and head of the global CDO group at UBS in New York, declined comment on the deal ahead of close.

20 Jul 2006