Pacific Investment Management Company is planning to issue a $400 million collateralized debt obligation backed by a pool of asset-backed investments, according to sell-side CDO officials. Merrill Lynch is underwriting the transaction, which has not yet been named, they say. This latest deal, PIMCO's third-ABS transaction, comes after Pacific Shores and Pacific Coast, its previous two structured finance CDOs. It is PIMCO's first of the year. The Newport Beach, Calif.-based bond manager will set up a vehicle to issue liabilities backed by high-quality structured finance assets, including ABS and outstanding CDO paper, according to an official familiar with the deal.
The official says the deal is worth noting because PIMCO has not issued as many structured finance CDOs as one would expect relative to its size because it does not need to add management fees, and so the deal represents some scarcity value and high-quality assets. A PIMCO official declined to comment and Chris Ricciardi, head of the structured credit products group at Merrill, did not return a call by press time.