Vertical Capital, a collateralized debt obligation investor and collateral manager partly owned by Bank of America, is planning to issue its second CDO, according to several sell-side CDO professionals. They say the New York-based firm, in which BofA holds a 42% stake, is marketing CDO liabilities in a synthetic arbitrage transaction that will be backed by investments in outstanding CDOs. The effort comes shortly after Vertical Capital's first deal, which was sold earlier this month, and is somewhat similar they add. One rival CDO official says the timing of this deal indicates that Vertical, with BofA's backing, plans to be an aggressive issuer of CDO liabilities. "To do another deal so quickly is pretty unusual," he adds. Banc of America Securities is leading this deal, dubbed Vertical CDO 2003-2, and was also lead manager on its predecessor, although Tom Pearce, president of Vertical, had said earlier this year that BofA does not have a lock on Vertical's CDO underwriting assignments (BW, 6/23). He and Justin Dash, an official at BofA working on placing the notes and to whom a query was referred, did not return calls.