Goldman to offer Triple A with a spread

|About: Goldman Sachs Group Inc. (GS)|By:, SA News Editor

Investors' quest for spread and AAA meets investment banks' need for cheap financing: Goldman Sachs (GS +0.2%) this week is expected to start a road-show for a new type of bond deal - the Fixed Income Global Structural Collateral Obligation (FIGSCO).

The paper will have a triple-recourse mechanism in which buyers will have recourse to a pool of assets backing the deal as well as an unsecured claim against Goldman and its joint issuer Mitsui Sumitomo Insurance.

"This will offer value and we expect the big liquidity books to get on board," says a syndicate banker. "On the negative side, the deal may require more knowledge than a plain Triple A trade."