Making sense of CDOs

As collateralised debt obligations gain in popularity, investor demand for specialised analytics to understand the risks inherent in these products is also on the rise. Clive Davidson reports

The enormous growth in demand for collateralised debt obligations (CDOs) in recent years has created an increased need for tools to measure and manage their risks, particularly among investors. This software is used not only to analyse new issues, but also to maintain those already in place through their lifecycles. Financial software suppliers have been responding to demand for CDO analytics with new applications, and in some cases they are working with advisory and trustee firms to create