CDOs

Morgan Stanley’s $7 billion purchase of Eaton Vance marks the latest wager that finding a big partner is critical to survival in the asset management industry.

The class A notes, secured by legacy trust-preferreds and subordinated debt of institutions, carry an investment-grade A1 rating from Moody's. That rating is slightly lower than a prior Hildene CDO, due to elevated pandemic risk to bank profitability.

Congressional investigations are often rushed affairs that fail to dig beneath the surface. But the hiring of a veteran investigator who has tangled with Deutsche in the past suggests that this politically charged inquiry is likely to be thorough.

The investors initially won the right to sue as a group in 2015 before an appeals court reversed the ruling; the $13 billion lawsuit can now proceed as a class action.

There could be a pause in new issuance as CLO managers wait to see if the government will appeal; longer term, the pace will pick up as the playing field is leveled for smaller managers.