A New ABS Index Boosts Synthetic CDOs

O'Connor, Colleen Marie
January 2006
Investment Dealers' Digest;1/30/2006, Vol. 72 Issue 4, p10
Trade Publication
The article reports on the impact of the launch of an asset-backed securities (ABS) index on synthetic collaterized debt obligations (CDO) in the United States. Analysts believe that synthetically references ABS could surpass issuance in cash-backed CDO of ABS in 2006. The reason for the rise of synthetic structures is that cash-backed CDO need to own the actual underlying securities as collateral. There are also not enough bonds to meet the demands of the growing CDO market.


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