CPDOs: the real driver of the credit rally?

New Angles


A number of parties are blaming the sharp contraction in credit spreads since late September - the five-year iTraxx Europe index has tightened in from 30.4 basis points on September 25 to 23.25bp by January 31 - on the latest invention in the synthetic credit market: the constant proportional debt obligation (CPDO).

Developed by ABN Amro in July, the CPDO has become the most heavily debated new instrument in the global credit market for several years. Some parties say the development of CPDOs

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