EUROPE - Fortis Investment Management has launched its first managed synthetic collateralised debt obligation (CDO), which already has two European pension fund clients.
The Royal Bank of Scotland Financial Markets-led Rubens CDO I is backed by a E1bn pool of investment grade corporate securities and synthetics (total return swaps and credit default swaps).
Unlike previous hybrid structures seen by the market, the structure of Rubens does not require a liquidity facility to fund the purchase of securities. Instead, RBS makes liquidity directly available to Fortis Investment Management to fund the securities through unfunded total return swaps.
Management fees for the CDO are low: 5bp for the senior notes and 10bp for junior notes – especially low as this is Fortis’s first product.Despite the market’s current avoidance of synthetic CDOs, Fortis said there has been very strong interest for all tranches of this transaction, particularly with the lower rated and unrated tranches.
The capital structure includes five tranches of floating rate notes and a combination note totalling E130m in the aggregate below a E870m super senior credit default swap.
All liabilities have a seven-year scheduled maturity date and average life and an eight-year legal final.
Christophe Tamet, senior fixed income manager at Fortis, said: “This innovative structure, designed by RBS, is the best way to introduce our philosophy of management in the universe of total return.”
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.