* The strong performance of two CDOs containing distressed debt CLOs (see ASR 1/20/03) has gone a long way in putting these new vehicles on the map. Now market sources are talking about the granddaddy of them all, as sources report a rating upgrade likely in the near term for ARK I, the $1 billion CDO that was the first feature distressed debt CLOs. Underwritten by FleetBoston Financial Corp. and managed by Patriarch Partners, Ark I made its market debut in 2001.
* SSB’s own Donald Quintin is crossing the Atlantic, relocating to New York to head up Salomon Smith Barney’s CDO trading business. Quintin was previously based in London where he worked as a senior CDO structurer. Quintin’s move is considered significant, competitively speaking, as just a few dealers have dedicated CDO traders, including Bear Stearns, Lehman Brothers, Banc of America Securities and UBS Warburg. – IFR Markets
* According to sources, Salomon Smith Barney will send out a trust preferred securities-backed CDO in March. The MM Community Funding Trust is scaled at $300 million and may bulk up beyond that, depending on asset ability. Additionally, a new partner was added to the deal – Service Asset Management Company (SAMCO). The structure will be similar to past trust-backed deals from Salomon and Sandler O’Neill. This follows word that Bear Stearns has its own Trups-backed CDO in the pipeline, set for pricing in the first quarter, called T-PREF Funding -IFR Markets
* We hear that the new FASB proposals will equate to hours of homework for those employed in CDO-land. As one market pundit lamented following a two-hour briefing’ session last week, “my head is still spinning and I understand [CDOs].”