Return of the synthetic CDO as liquidity builds

Synthetic CDOs
By Daniel O'Leary
26 Jun 2014

The synthetic collateralised debt obligation market, not seen since and often blamed for the onset of the global financial crisis, could see a revival in Europe and the US, following the implementation of the International Swaps and Derivatives Association’s 2014 credit derivatives definitions in September.

A lawyer in London noted there is enough liquidity in the underlying CDS market to warrant the CDO market’s revival. The single-name credit-linked note market is also seeing increased activity in Europe and the UK, which signals that investors could be keen for fresh CDO paper as they ...

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