The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Deal insider: Securitizing European high-yield debt

Issuer: EuroCredit CDO 1

Amount:416.5 million

Type of issue: European high-yield collateralized debt obligation

Date: August 11, 1999

Bookrunner: Morgan Stanley Dean Witter

A sure sign that the European high-yield debt market is expanding and maturing is the appearance of wider and more sophisticated investment products. The increasingly diverse range of new issues and a more reliable and regular flow of deals have opened up the market, and are attracting new investors. To capitalize on this, in August, Morgan Stanley Dean Witter and UK mezzanine finance specialist Intermediate Capital Group (ICG) introduced high-yield collateralized debt obligations (CDOs) to Europe.

High-yield CDOs are a staple of the US debt market, accounting for approximately 20% of all high-yield investments. In the first eight months of this year, $25 billion of US CDOs have been issued. They are special purpose vehicles that invest in a portfolio of assets and are funded through securitization. In this case the portfolio will consist of non-investment grade bonds, loans and mezzanine positions including many from large European MBOs for which ICG arranged and provided mezzanine financing, and ICG will act as investment adviser for the CDO. Several classes of securities are typically issued, carrying differing levels of risk and return.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree