SPE accounting proposal threatens CDO market
Proposed changes to US accounting standards for special-purpose entities (SPEs) could cause a dramatic decline in issuance of collateralised debt obligations (CDOs), analysts say.
These changes would almost certainly force some sponsors to bring their CDOs on to their balance sheets. CDOs are usually structured as SPEs, and their sponsors typically retain equity stakes in the deals they manage. But the equity portion of the CDO capital structure may not meet FASB’s proposed tests
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