Panelists said the popularity of triggerless collateralized debt obligations may wane when the credit cycle turns. A number of synthetic CDOs characterized by cashflow structures without over-collateralization or interest-coverage triggers have hit the market recently (DW, 7/21). These deals target equity investors. "Triggers will come back when downgrades start happening," said Lang Gibson, director at Merrill Lynch. "It's a function of the credit cycle."
Triggerless Trades To Wane
