Credit Suisse First Boston has priced the notes for Credit Suisse Asset Management's CSAM Funding III collateralized debt obligation. The $401 million deal was initially slated to be $350 million but was increased due to investor demand, said a source. The $292.5 million AAA tranche priced at LIBOR plus 58 basis points. The top rated tranches on recent deals are reported to have priced at LIBOR plus 55 basis points, but one manager disputed this.
The manager stated, "Deals are getting priced at [LIBOR plus] 55 ... but are not being sold at par." He added that CDO paper is being tied to other deals. "In this market, there are always guys trying to cut different deals. Buy this deal, then bid on this piece of paper," he said. The equity tranche is $36 million.
The source said the collateral for the CSAM CLO III is similar to other CLOs, with a 15% bond bucket included. The CDO is significantly ramped up and includes mostly par assets, he added. Officials at CSAM declined comment and Jerry DeVito, co-head of the leveraged finance CDO group at CSFB, did not return calls.
| How It's Priced | ||
| RATING | TRANCHE SIZE | PRICING |
| Aaa/AAA | $292.5 million | LIB+58 |
| Aa2/AA | $26.25 million | 4.96% |
| A3/A- | $20.85 million | 5.61% |
| Baa2/BBB | $18.9 million | LIB+300 |