CDOs of CDOs: art eating itself?

By Darren Smith

credit-derivatives-book
This article was first published as a chapter in Credit Derivatives, by Risk Books.

DEVELOPMENT OF THE MARKET

The collateralised debt obligation (CDO) market has grown from virtually nothing in the early 1990s to a market growing at an annual rate of over US$150 billion rated notes per annum. The CDO or collateralised bond obligation (CBO) market, as it was initially, grew out of the junk-bond market meltdown of the early 1990s. After that market recovered, there was no new issuance for a per