The demise of the leveraged investor

RMBS

The era of the highly leveraged buyer is all but over, according to one mortgage trader at a leading European investment bank. Banks and leveraged investors, which include asset-backed commercial paper (ABCP) conduits and structured investment vehicles (Sivs), have until recently accounted for 80% of buyers of RMBS, mainly buying triple-A paper, according to Merrill Lynch. But since leveraged buyers depend on the capital markets for funding, their recent liquidity problems have forced many to se

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