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Structured credit: They’re back! Leveraged super seniors return

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Citi markets new deal; CDS at post-2007 tights.

Still, while some structural issues with leveraged super senior tranches might have been addressed, investors still need to find the deal attractive, and some have raised questions over the pricing.

“We looked at the deal but according to our calculations it should be paying around 5.5%, rather than the 3.5% they are offering,” says one fund manager. “For me it’s a bit too expensive, and it seems that Citi are looking to get a cheap hedge and hoping some investors go for it.”