Getting investors into the comfort zone

CDO equity

"It's clear that the junior tranches of investment-grade CDOs offer a lot of value to investors, but the problem is that in its natural form there are very few buyers of equity," says Nitin Prabhu, co-head of credit structuring at Deutsche Bank in London. "The key is to repackage it in a form that makes it accessible to investors so they can access that value."

To date, equity has been packaged in a few different ways – most commonly in the form of combination notes and capital-guaranteed