Bankers in Europe are testing variations of a type of structured product that boomed until the subprime crisis, as they seek to take advantage of strong investor demand for high-yielding assets.
Barclays and Credit Suisse are preparing collateralised loan obligations – which bundle corporate loans primarily for leveraged buyouts into a single vehicle – for investment groups Pramerica and Cairn Capital, said sources close to the deals.
The deals, expected as early as next month, would be the first European issues since the subprime crisis to comply with new regulations that require those managing them to keep some “skin in the game” by holding a slice of equity.