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"Compared with CDOs that have been launched on non-traditional assets, this has been excellent" Atanas Bostandjiev, Merrill |
Optimism that the launch of collateralized foreign exchange obligations (CFXO) would attract a new range of participants to the market (see Structured products: CFXOs bring in new investors, Euromoney June 2007) now looks well founded. Merrill Lynch says that it attracted more than €1 billion ($1.34 billion) for its recently launched CFXO, which is managed by Crédit Agricole Asset Management. "The deal went much better than we even expected," says Atanas Bostandjiev, managing director and head of structured rates and FX marketing, EMEA, at Merrill. "The roadshow in Europe alone raised the global target. Compared with CDOs that have been launched on non-traditional assets, this has been excellent."
Merrill was originally looking to attract between €500 million and €1 billion in funds. However, it now says that the first deal, which closed in mid-June, raised more than €1 billion. "We’re really pleased with the result. There was good demand for the whole structure, from the AAA-rated to the equity tranches," says Bostandjiev.
Nicolas Rabeau, co-head of global rates exotics trading and global head of hybrids trading at Merrill says that the demand was from across the investment community.