Manning on TruPS

Our own Mike Manning was quoted in Global Capital this week in an article about the Trups market and the possible negotiated paths to release of bank capital for restructuring purposes. He highlights the difficulty that some issuers have in finding their investors in order to negotiate these restructurings:

‘But while holders of the CDOs may know which banks they are exposed to, the banks themselves may not know which CDOs their TruPS were bundled into,’ said Mike Manning, Ceo of DealVector, an online platform that helps connect the various counterparties in structured finance transactions. ‘If you are coming up to the end of your deferral period, you need to figure out which CDO holds your bond,’ he said. ‘Once  you figure that out, you can talk to them.’

He goes on to describe some of the market dynamics:

But even if banks can get in contact with those investors, that doesn’t mean everyone’s interests are aligned. ‘These are unattractive, hold-to-maturity securities,’ Manning said. ‘If the TruPS CDO holders can get out at 90 cents on the dollar, they would rather have the cash than have the bond cured and continue to pay out at a low yield.”

Many users on DealVector are very familiar with these dynamics!