© 2026 Arizent. All rights reserved.

Mutual fund 12b-1 fee market still kicking, with structural enhancements

Published 1 Min Read

Constellation Financial Management has its second deal of the year in the market, a $290 million area Aa2/AA (Moody’s/Fitch) floating rate privately placed securitization of 12b-1 mutual fund fees via Bear Stearns. The deal is indexed over three-month Libor.

Bear is also the warehousing agent for the transaction, sources said. Differing from 12b-1 fee deals that have seen ratings volatility, Constellation has added a new put option hedge feature that ties the deal’s performance to equity market indices such as the S&P 500, which acts as added credit enhancement.

Though the sector saw significant ratings migration last year, which followed plummeting asset values in the equity markets, several deals, from both Constellation and its main competitor Citibank, have closed below the radar screen with new equity hedge protections built in them.

For reprint and licensing requests for this article, click here.

More From Asset Securitization Report

GS, DB and BofAML Plan $1.12B in CMBS

Single asset/single borrower deals continue to dominate the CMBS pipeline this week with another two deals, for a combined $1.43 billion planned this week.

Middle-Market Securitizations: Trends and Outlook for 2010

“There are snakes that go months without eating. And then they finally catch something, but they’re so hungry that they suffocate while they’re eating. One opportunity at a time.” – Don Draper, Mad Men The year 2009 was a year of mixed signals-on one hand, revised assumptions by rating agencies such as Moody’s Investors Service […]

Bear Stearns’ Debacle Saps Tapped-out CDO Market

As if the Bear Stearns liquidation were not enough to ruffle the ABS CDO market, industry participants expect similar meltdowns to occur within the next few weeks. And as difficulties increase in placing portions of ABS CDO issues across the credit spectrum, further market drama will only weaken the demand. A recent research report from […]

ABS market creeps slowly back with $5.2B

The asset securitization market did not exactly come roaring back last week from its spring break. While market professionals hoped that the market would produce about $14 billion in new issuance by week’s end, it actually came in at about $5.2 billion by press time. Bear Stearns brought a $713 million home equity loan deal […]