Understanding the product

Since their inception, CDO critics have expressed concern about the transparency of the product. In thepast few years a succession of products and initiatives has been produced to help investors understandwhat a CDO contains and how it is performing

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As volumes in the CDO market began to expand rapidly in the mid to late 1990s on both sides of the Atlantic, misgivings were frequently expressed about the level of transparency (or lack of it) in the primary and secondary market. As one analyst was quoted as telling the Wall Street Journal in September 1997, when NationsBank launched its record-breaking $4 billion transaction: “You’re blind to the underlying obligors.”

Misgivings about the transparency of the CDO market may have receded since

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