Manager and investors fight CDO event of default

Mystery surrounds the status of Cedarwoods CRE CDO II, a deal which was thought to have incurred an event of default. Earlier this month a trustee notice from US Bank indicated that the CDO had indeed suffered an event of default following which Standard and Poor’s reports that it received an additional notice from the trustee that senior noteholders had voted to liquidate the transaction.  

However this move has not been well received by the manager, Angelo Gordon, as well as the deal’s class A-2 investors. Both wrote to S&P objecting to the event-of-default declaration that was made. US Bank filed an lawsuit last week against the issuer, the collateral manager, the A-1 noteholders and the A-2 noteholders, leaving the courts to decide the fate of Cedarwoods CRE CDO II. 

The rating agency adds that the potential liquidation is now thought to be on hold until a resolution is reached.