Considerations for dynamic and static, cash and synthetic collateralised debt obligations

By Alexander Batchvarov, Jenna Collins and William Davies

This article was first published as a chapter in Credit Derivatives on September 1, 2003, by Risk Books.

European collateralised debt obligations (CDOs) have evolved from early, static, balance-sheet cash transactions to utilise synthetic execution, synthetic assets and various dynamic forms of credit portfolio management. As the market continues to evolve, diversification takes on new dimensions, potential volatility and complexity of excess cash flow may increase, currency risk is more dynam