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JP Morgan Chase prepares largest Asian managed synthetic CDO

JP Morgan Chase is preparing to launch what will be the largest synthetic collateralised debt obligation (CDO) to date to be managed by an Asian fund manager. The $1.7 billion deal will be managed by Singapore's UOB Asset Management, say Asian investors approached by the bank.

    • Nick Sawyer
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The transaction will be the third synthetic CDO to be managed by an Asian fund manager, and the second to be managed by UOB following its $1.33 billion deal arranged by Deutsche Bank in September. Lehman Brothers launched a $500 million synthetic CDO managed by Hong Kong-based PCI Investment Management in November.

Details of the JP Morgan Chase deal are sketchy, but the transaction is believed to consist of two rated tranches - an AA and BBB tranche each representing 2% of the portfolio. The equity portion is thought to be around 3% of the deal.

Officials at JP Morgan Chase would not confirm or deny the deal, but an investor said the transaction will likely close next week.

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