Synthetic CDOs back as hedgies drive full cap sales

Synthetic CDOs
By Beth Shah, Will Caiger-Smith
08 Jan 2015

Synthetic collateralised debt obligations, one of the financial products synonymous with the global crisis, are set to accelerate their recent tentative comeback. Real money investors are joining hedge funds in chasing the controversial instruments’ double-digit yields, write Will Caiger-Smith and Beth Shah.

BNP Paribas, Citigroup and other investment banks are leading the charge in the product, moving risk off their balance sheets via the selling of whole portfolio capital structures rather than warehousing any risk.

“At one point if you walked into your boss’s office and said you ...

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