Canyon Capital Advisors, a Beverly Hills-based asset manager, is readying Canyon Capital CBO, a $375 million deal that will be its first collateralized debt obligation of the year, and its second overall, says a CDO market official. J.P. Morgan Securities is underwriting the notes, which are set to price at the end of the month or early November. A mix of 75% high-yield bonds and 25% leveraged loans back the notes. The collateral pool has a single-B weighted rating average. No price talk levels were available at press time last Thursday. This deal comes at a time when high-yield CDO issuance has slowed down significantly, due to investors' skittishness on high-yield bonds; but with wider high-yield spreads, those deals are attractive from a structurer's standpoint as they offer cheap collateral and good arbitrage, notes a CDO analyst (BW, 9/9).
Chris Evensen, a managing partner at Canyon in charge of the deal, did not return calls. Romita Shetty, head of the structured credit products group at J.P. Morgan, did not return calls.