Defaults domino

The bankruptcy of several western financial institutions in September sparked widespread losses in the structured credit market. Corporate defaults are also on the rise, leaving 'tough-it-out' investors in a tight spot

Any optimism that the credit markets would recover and synthetic collateralised debt obligation (CDO) investments might pull back to par or even yield positive returns by maturity were dashed by the defaults of Lehman Brothers and six other western financial institutions since September.

That has left many Asian investors - including fund managers at insurance companies, wealth management units of local and regional banks, and commercial banks that tried to tough out the credit crunch - nursing