CDOs reunited

Hybrid CDOs

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It's a touching story: shortly after birth, the synthetic collateralised debt obligation (CDO) was separated from its older relative, the cash CDO, and taken along a very different path. The two types of CDO developed distinct structural conventions, appealed to different groups of investors, and were often arranged by separate teams within investment banks, each with its own head presiding over parallel ranks of structuring specialists. To all intents and purposes, cash and synthetic CDOs l

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