Securitization has come a long way since the concept gained popularity in Asia several years ago. It has now moved beyond the specialists' area and has become more broad-based. Capital-raising exercises in the region routinely feature securitized instruments. And these have become increasingly more exotic. Synthetic collateralized debt obligations (CDO), for example, now come in many varieties: hybrid cash/synthetic and inedex-linked and synethetic re-securitization. They can be single-tranche or multi-tranche. The single tranche may be static, lightly managed or fully managed. The static version may incorporate additional structures featuring reserve funds, step-up coupons and diversion of excess spread.
October 01, 2003