Weil Gotshal & Manges has advised on the first wholly euro-denominated collateralised debt obligation (CDO).
The US firm's London office worked with investment bank Morgan Stanley to structure Eurocredit, a holding company for assets of euro416.5m (£268.7m) of high-yield bonds, leveraged loans and mezzanine debt. Weil Gotshal capital markets partner Erica Handling says the variety of assets may attract investors to the high-yield market. “Everyone is looking at the European high-yield market, which is still in its infancy,” she says.
“Instead of buying a high-yield bond, you can buy an interest in that market but have a higher credit rating. [The transaction] is bringing instruments like CDOs to the European legal market, and the diversity of the portfolio opens it up to another set of investors.”
Ashurst Morris Crisp advised Intermediate Capital Group, which will manage the portfolio.