The competing bidding group appears to be Citi/Goldman's Sack/CS, and they are also soliciting bids from their clients that will effectively be passed through as a bid on the two MAX CDO tranches (and passed back in pro rata amounts if they get oversold), but they are not re-securitizing anything.
Both parties are charging a 0.25 mark up for their strategy.
No one can blow up the original CDOs without consent of the MAX junior bondholders (purportedly DB) or paying off an interest rate swap to Barclays according to this one article. And both of these strategies seem to put the CDOs far from any near-term scenario that would result in a flood of pure CMBS collateral on the streets.
Let me know if you have any more to add...
Prior post:
5 comments:
Good stuff DarkSpace keep it up.
Still had a few facts off - the BAML team included Morgan Stanley. Barclays and Deutsche bid separately, and they ultimately won, as has been widely reported. So I wonder if they bust it up (Deutsche purportedly owns the junior bonds) or resecuritize (Barclays purported plan).
Either way the market didn't really seem to notice with GG10 A4s in more than 10bps. It's like I just walked on to the trading desk with an 800 kilo highland cow, ate it all right there on the hoof, and promptly sat down to play with Excel and no one even noticed.
So the market didn't even hiccup at all?
Why all the frenetic reporting leading up to yesterday. Media made it seem like this was going to dent the market like MLII did to RMBS.
(sigh)
AND there was another $3+ billion in new issue at the same time (Ala Moana, UBSCM 2012-C1, and JPMCC 2012-C6).
Someone at the CMBS dinner table has got to be holding back at least a little belch. If they let it out and prices get weak in the near term, I think it will be a good buying opportunity.
the market already ticked down a few points when the sale was announced. Their timing was excellent as many of these AJs will be way down in a year.
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