Reinventing the wheel
The new wave of structured credit innovations look suspiciously like more confusing, highly leveraged versions of deals the market has seen before. Is all this reinvention in investors' best interests? Sarfraz Thind reports
2006 stands out as a bumper year for product innovation: from ABN Amro's first constant proportion debt obligation - Surf - and Lehman Brothers' rated equity deal - Bison - to the host of constant proportion portfolio insurance variations and multi-asset class managed synthetics. Dealers have been locked in fierce competition to produce new, ever more complex deals. At the same time, tight credit spreads have pressurised arrangers to push the boundaries of product development in an attempt to
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