Tranche, Correlation Trading Fizzles Out

16 May 2008

Bankers and hedge funds are questioning the future of single-tranche collateralized debt obligations and the associated correlation trading business.

Bankers and hedge funds are questioning the future of single-tranche collateralized debt obligations and the associated correlation trading business. The bid for tailor-made tranches has dried up since investors have grown concerned over spread volatility and ratings uncertainty. Fitch Ratings recently changed its ...

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