Spread widening causes first CPDO unwind

Massive spread widening in financial credits has resulted in the first forced unwind of a constant proportion debt obligation (CPDO), realising enormous losses for investors. The Series 103 Tyger notes, first issued by UBS at the start of July with a rating of Aaa from Moody's Investors Service, were downgraded to C on November 21 after the net asset value of the deal fell to 10%, causing the product to automatically liquidate.

Three further CPDOs issued by UBS were downgraded by Moody's to Baa2,