"Goldman may have simply decided the Libor plus 175 basis points investment was attractive for their own internal investment, whereas large banks are still in a loan exposure reduction mode," said Darrell Wheeler, senior managing director at Amherst Securities Group in New York.
"Not having a rating is fairly experimental and it was likely difficult to find investors for more than a billion of unrated paper," Wheeler said.
Dan Nigro, chief executive of Warfield Consultants, a Montclair, N.J., firm focused on asset-backed and residential mortgage-backed securities, thinks this bond is a precursor to other unrated bonds because the ratings agencies have been discredited during the past few years.
"There is an entire market that trades without ratings and there are enough people who can evaluate these bonds without needing ratings so there will be an evolution to a private market that will be largely unrated," he said.
Thursday, November 18, 2010
Goldman's out, deal size is smaller, pricing today (maybe).