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Hedge funds are gearing up to invest in distressed assets, and many new funds are being formed for the same purpose.
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"Structured" covered bonds have been developed in the U.K. since 2003.
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The financial markets have been in a crisis since the summer of 2007 due to housing price declines and higher interest rates, causing defaults on sub-prime mortgages.
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The dislocation in the structured finance markets has led to significant investor interest in "opportunity" or "distressed" strategies targeted at taking advantage of the attractive entry points common to many forms and types of whole loan and securitized mortgage related product.
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Transparency is rapidly emerging as the solution for restoring trust in pricing and therefore liquidity in the structured finance markets. -
Constant proportion debt obligation mechanics are important in the current environment.
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March is here and that means Spring Training.
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Shariah-compliant finance would appear to be at a major disadvantage when compared to conventional Western fixed income.
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The well-publicized exposure of U.S. financial guaranty insurance companies to losses from the repackaging of sub-prime mortgage loans into residential mortgage-backed securities, and the repackaging of BBB and lower-rated tranches of RMBS into asset-backed securities collateralized debt obligations, has caused concern about those insurers' financial ability to withstand losses from such exposure.
