BofA Preps First Of Kind Loan CDO

Banc of America Securities is readying a synthetic single tranche collateralized debt obligation referencing a USD750 million portfolio of leveraged loans, which is thought to be the first deal of its kind.

  • 20 Aug 2004
Email a colleague
Request a PDF

Banc of America Securities is readying a synthetic single tranche collateralized debt obligation referencing a USD750 million portfolio of leveraged loans, which is thought to be the first deal of its kind. Although synthetic collateralized loan obligations have already hit the market, these are more commonly created for banks wanting to hedge out the risk of their loan books, rather than being sourced from the market, and have thus far been full capital structure deals. Single tranche CDOs, meanwhile, have mainly comprised credit derivatives referencing bonds. Melissa Fox, spokeswoman at BofA in New York, declined comment.

One reason for the paucity of single-tranche portfolios referencing leveraged loans is it is harder to source loans for such structures because the leveraged loan market is markedly less liquid than the bond market. This also makes the tranches challenging to delta hedge, noted an official. It could not be determined how BofA is tackling this problem.

Rivals say the deal could be the first of many because credit derivatives referencing leveraged loans are generating a lot of buzz. Last year Credit Suisse First Boston launched the first synthetic index of leveraged loans in a bid to boost liquidity (DW, 10/20). BofA is thought to be in the final stages of structuring the deal, which is expected to come out in the next month.

  • 20 Aug 2004

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 29,333.03 101 7.94%
2 JPMorgan 27,208.83 91 7.37%
3 Barclays 23,714.00 55 6.42%
4 Bank of America Merrill Lynch 20,332.10 65 5.50%
5 Goldman Sachs 20,005.21 49 5.42%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 48,528.41 214 6.32%
2 Deutsche Bank 44,075.51 161 5.74%
3 BNP Paribas 41,452.79 240 5.40%
4 JPMorgan 37,278.65 134 4.85%
5 SG Corporate & Investment Banking 36,258.27 187 4.72%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 1,607.28 5 23.24%
2 Credit Suisse 1,301.65 4 18.82%
3 UBS 970.80 3 14.04%
4 BNP Paribas 522.35 4 7.55%
5 SG Corporate & Investment Banking 444.17 3 6.42%