M&G Investment Management is aiming to bring to market its first collateralized debt obligation of asset-backed securities later this quarter or early next. Dagmar Kent-Kershaw, London-based head of CDOs, says M&G is doing a CDO of ABS, because the firm has always been active in the asset class and it offers good arbitrage opportunities. The E400 million deal will be called Pallas.
The firm closed a CDO of leveraged loans last week. Called Leopard I, the E277.1 million deal was M&G's first CLO, but CDOs of leveraged loans is another area where M&G plans to continue building deals. Kent-Kershaw says M&G plans to do another such deal this year. "CDOs of leveraged loans and asset-backed seem to be what investors want. They are solid, low volatility asset classes," she says.