Static synthetic collateralized debt obligations are twice as likely to default as a managed transaction, said Kenneth Gill, managing director and head of European CDOs at Fitch in London. The group's analysis of rated CDOs in 2005 showed static deals had a downgrade ratio of 5.5%, compared with 2.6% for managed offerings. Gill said this statistic backs a market move towards managed deals.
Static CDOs More Likely To Default
