CPDOs hit by ratings reviews

Investors in constant proportion debt obligations (CPDOs) were given an unwanted early Christmas present by rating agencies on December 20, as both Standard & Poor's (S&P) and Moody's Investors Service put the ratings of billions of dollars of CPDO notes on review for a possible downgrade. All 29 of S&P's public CPDO ratings are now under threat. The agency pointed to factors such as spread volatility and rising correlation as being detrimental to the net asset values (NAVs) of th