Stone Tower Capital, Centre Pacific and American Express Asset Management are said to be moving ahead with plans to raise new collateralized debt obligation funds, not letting the lowest leveraged loan spreads since 1998 deter them. One CDO investor said his firm has funded the lower-rated tranches for a mass of deals in the last few weeks, including CLOs for Aladdin Capital Management, D.L. Babson & Co., MJX Asset Management and Credit Suisse Asset Management. "We're not worried about spreads. That's an equity play," he noted.
Centre Pacific has inked a deal with Bear Stearns, according to a source. This is after stalled attempts with Goldman Sachs and then UBS. In the case of UBS, the transfer of Gina Hubbell led to Centre Pacific ending its arrangement with the bank (LMW, 3/30). John Casparian, a portfolio manager at Centre Pacific, declined to comment and Bear Stearns officials did not return calls. A source said the Los Angeles-based loan shop has a good track record, with its Sierra deal performing well.
Meanwhile, Stone Tower has signed on with Credit Suisse First Boston to launch its second fund, according to bankers. Levitt did not return repeated calls and a CSFB spokesman declined comment. It could not be ascertained which bank AMEX has signed on with and officials there did not return calls.