INVESCO, the institutional asset management arm of British buy-sider AMVESCAP Plc, is trying to raise roughly $400 million from investors as part of a collateralized debt obligation of underlying structured finance, according to CDO professionals. They say the deal is being marketed as a cash flow arbitrage transaction and is dubbed Blue Grass I by the Louisville, Ky.,-based INVESCO. Observers say the deal is rather routine and add that it and other CDOs of ABS can be seen as a good way to test the market's appetite for structured finance CDOs, which have emerged as the most-active underlying CDO asset class given that the high-yield market's arbitrage has disappeared. Roughly $6.5 billion has been priced in structured finance CDOs this year, or about a third of the overall CDO market.
Credit Suisse First Boston is underwriting the offering. Bill Hensel, a spokesman at the asset manager, declined to comment.Tom Pascale, managing director and acting head of U.S. structured credit products at CSFB, declined to comment.