Attentus Management Group is in the market with its first commercial real estate-backed collateralized debt obligation. About 56% of the $500 million CDO is comprised of real estate trust preferred securities and another 36% is comprised of senior or subordinate debt, including secured loans.
Attentus Management Group is a joint venture between Financial Stocks and Sandelman Partners, a hedge fund headed by Jonathan Sandelman, former head of equities at Bank of America. Sandelman officials did not return calls.
Nathan Flanders, a CDO analyst at Fitch Ratings, noted that the 36% bucket of senior and subordinate debt is senior to the TruPS in the deal's capital structure. Because of this mix, there should be strong demand for the offering, market participants said. Flanders added that the deal's senior and subordinate debt is more heavily weighted toward homebuilders perhaps because the recent slowdown in housing starts has contributed to higher yields on these loans.
Both partners have CDO management experience but this is their first pure real estate CDO. Through its Trapeza CDO program, Financial Stocks manages more than $3 billion and has issued nine CDOs since November 2002 backed primarily by trust preferred securities. Sandelman's fund has a number of real estate professionals within the ranks. Market participants noted that many of the investors familiar with the issuers will follow them into their first CRE CDO.