HSBC and Babson close $502 million CDO

HSBC and Babson Capital, the Massachusetts-based asset managers, have closed a $502 million managed synthetic CDO.

HSBC was sole arranger for “Maple Hill”, which consists of mezzanine tranches rated A to AAA by Standard and Poor’s. It references 125 names and has an extended maturity of seven and 10 years.

Stephen Olentine, head of product marketing for global structured credit products at HSBC, said: “In this tight spread environment, CDO investors across the globe are demanding high-quality portfolios managed by the very best firms. The participation rate by investors on the Maple Hill roadshow was the highest we have ever seen, and reflects the strength of the Babson Capital credit team.”

Tranches were placed with investors from North America, Europe, the Middle East, Australia and Asia. There were 12 issues in swaps and credit-linked notes, with fixed and floating coupons in euros, and in US, Hong Kong and Australian dollars.