J.P. Morgan Chase is assembling a collateralized debt obligation with American Express Asset Management as investment manager, employing the Morgan Intermediate Collateralized Loan Obligation Securities (MINCS) structure. According to BondWeek, an LMW sister publication, market players note that this marks the first time that AmEx will serve as manager of a structured product consisting entirely of loans. In March, AmEx hired Yvonne Stevens and Lynn Hopton from SunAmerica Corporate Finance, a move that industry observers at the time said would allow AmEx to expand its in-house structured product management capabilities beyond high-yield CDOs to include loan structures. The Minneapolis-based firm has managed CDOs with high-yield collateral, as well as some with relatively low loan components, totaling some $3 billion. Calls to Stevens, Hopton and other AmEx officials were not returned by press time. Marketing on the transaction, which is expected to close in March, began late last week. The deal with AmEx would be the bank's sixth MINCS transaction. J.P. Morgan originally developed MINCS to compete with Chase Securities' Chase Secured Loan Trust (CSLT) by providing an investment-grade rating and leveraged exposure to bank loans. The MINCS structure came to be regarded by some investment managers as superior to CSLT for its greater transparency, and market players note that the relative popularity of MINCS could lead to the phasing-out of the CSLT structure. The first MINCS transaction, a $700 million deal that came to market in April 1999, was managed by TCW Asset Management. Others followed with managers including ING Capital and Pilgrim Investments.
AMEX GETS THE NOD FOR NEW J.P. MORGAN CHASE MINCS DEAL