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Collaterized Bond Obligation
The investment objective of this product as an alternative investment is to generate equity-like returns while exhibiting a low correlation with traditional asset classes. A CBO is an asset-backed security supported by an underlying portfolio of primarily corporate bonds. CBOs are created by issuing multiple debt tranches (leverage) to investors in order to finance the purchase of the underlying portfolio (collateral). The different tranches provide for various levels of priority in the underlying collateral. An investment in the residual interest of a CBO is the first loss position. It is a cash flow based strategy that provides current income distributed from available funds on a semi-annual basis. The coupon may be deferred or eliminated depending upon available cash flow. The investment generally has a low duration.
Lone Star CBO Funding Ltd.
Lone Star CBO Funding Ltd. is an investment-grade-average collateralized debt obligation (CDO) managed by Sage Advisory Services Ltd Co. The Lone Star transaction closed in December 2000 with an initial collateral balance of $300,030,000. Salomon Smith Barney acted as the underwriter.
Deal Summary
Collateral Manager:
Closing Date:
Initial Portfolio Requirement:
Type:
First Coupon Date:
First Call Date:
CUSIP:
Bloomberg Ticker:
Payment Frequency:
Trustee: |
Sage Advisory Services Ltd. Co.
12/14/2000
$300,000,000.00
Investment Grade CDO
6/15/01
12/15/03
542242AA0
542238AA8
LONE<MTGE>
Semi-Annual
Chase Manhattan Bank |
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