In-depth introduction: CPDOs

house-of-cards-mark-long

The brochure, dated October 2006, refers to “a breakthrough in synthetic credit investments”, trumpeting the new product’s AAA rating and claiming it has a high probability of cashing in – or earning enough during the early years of its 10-year existence to meet its obligations without needing to take any further risk.

A year later, the market for constant proportion debt obligations (CPDOs) was dead, and investors were already sitting on heavy losses.

Since then, the question has been how the p

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: