HSBC is bringing a mezzanine collateralized debt obligation to the market. Grand River, which is being managed by Principle Global Investors, is being shown in seven- and 10-year offerings and is expected to be taken up by banks and insurance companies. Jeffrey Tolk, Asia-Pacific head of structuring for HSBC in Hong Kong, said one novel feature is the investor has the option to buy notes that give immunity from defaults for the first 18 months. He declined to elaborate further on the mechanics of the feature.
Grand River was launched in Asia last week, and is expected to roll out in Europe and North America shortly.