Once upon a time, collateralised debt obligations (CDOs) were seen as a kind of financial alchemy – converting relatively low-rated mortgage-backed securities into AAA-rated bonds that were popular with investors around the world. When the crisis hit in 2007, the chemistry fizzled out. CDOs quickly turned from gold back into lead, and banks have been trying to get them off their balance sheets ever since.
But the stars are now aligning to provide a way out. With interest rates still at record