Cashflow CDOs contain more CDS, says Fitch
The rating agency reckons around 30% of the collateral in recent CDOs is synthetic
Fitch Ratings says synthetic securities such as credit default swaps are more prevalent in the portfolios of recent cashflow collateralised debt obligations (CDOs) it has rated. According to the rating agency, synthetic securities have accounted for around 30% of collateral in recent deals. Until recently, the historical average had been 5-10%.
Synthetic securities are becoming more popular as they enable asset managers to more easily obtain their allocation from a specific issue for deals they
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