Investors wise up to structured products

collateralised debt

Rising investor acceptance and sophistication has resulted in structured credit products becoming conventional tools for adding yield. The strength of the collateralised debt obligation (CDO) market in 2004 had a marked influence on the cash bond market, forcing spreads to tighten for 29 out of 30 consecutive trading sessions running up to mid-September.

The compressed spread environment has been problematic for structurers, as the expensive levels of underlying assets restricted construction

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