A $397.5 million real estate collateralized debt obligation, whose collateral is managed by GMAC Investment Advisors, is expected to price later this month. Goldman Sachs, Wachovia Securities and Morgan Stanley are on a roadshow until the end of this week to sell the debt of G-STAR 2002-2 CDO, says a CDO market official. Goldman and Wachovia are joint lead-managers while Morgan Stanley is co-manager. No indicative pricing was available at press time. Brian DiDonato, portfolio manager at GMAC Investment Advisors in Horsham, Pa., did not return calls.
A mix of approximately 55% commercial mortgage-backed securities, 30% REITS and 15% asset backed securities backs the notes. It is the third real estate CDO to be managed by GMAC, after its G-STAR 2002-1 underwritten in April by Goldman and Wachovia and its G-FORCE 2002-1 sold last June, underwritten by Morgan Stanley and Bear Stearns.
This official notes that, unlike most corporate CDOs, which are sold by only one underwriter, it is not unusual to see joint book runners teaming up for the underwriting of real estate CDOs. The main reason lies in the underlying CMBS collateral. He reasons that "the CMBS business is a trading business" and that investors are used to dealing with multiple advisors and dealers as a way to increase liquidity.