CDOs: the growth of structured credit

CDO market

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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 last year 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 the constructi

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