Structurers are looking to lever super-senior tranches of synthetic asset-backed securities, panelists said. The structure became popular last summer as a way of boosting returns on synthetic corporate CDOs without diluting the tranches' credit ratings, but only a few such deals so far have been done in the ABS market (DW, 2/17). Darius Grant, managing director at Citigroup in New York, said, "The conversations are pretty far advanced." Investors still on the sidelines of the synthetic ABS market said they expect to enter the market by way of this structure.
Leveraged Super-Senior ABS Set To Take Off
