Morgan Stanley plans to repackage a downgraded collateralized debt obligation backed by leveraged loans into new securities with AAA ratings in the first transaction of its kind, said two people familiar with the sale.
Morgan Stanley is selling $87.1 million of securities that it expects to receive top AAA ratings and $42.9 million of notes graded Baa2, the second-lowest investment grade by Moody’s Investors Service, according to marketing documents obtained by Bloomberg News. The bonds were created from Greywolf CLO I Ltd., a CDO arranged in January 2007 by Goldman Sachs Group Inc. and managed by Greywolf Capital Management LP, an investment firm based in Purchase, New York.
Why didn’t I think of this? Oh, wait? I did. JUST THIS MORNING:
Why can’t they just do with the bad assets what they did with everything else the past couple decades? Just splice ‘em up a bunch, sell and re-sell them so many times that no one knows what the hell is what, bundle them up, have the ratings agencies slap a AAA rating on them, and sell them to small towns in Georgia and Norwegian pension funds. Voila! Problem solved! Then have AIG insure them, and Goldman can make another ten billion in default swaps and hand out some bigger bonuses. Also, rename them- they are not bad assets, they are “Under-Priced Yields Offering Untold Riches For Offshore Overseas Longterm Speculators (UPYOURsFOOLS).” Screw you Kenny Lay! Let’s get rich, bitches! What could go wrong?
I’m speechless. I really am.