Insurers warm to synthetic debt

Taiwanese insurance firms have been big buyers of collateralised debt obligations since rules came into force in 2004 to allow them to invest in such products. Eric Slighton at Barclays Capital tells Jill Wong about a recent deal

Taiwan's synthetic collateralised debt obligation (CDO) market has developed swiftly since May 2004, when regulations were first introduced to allow insurance companies to invest in these products. Not only has the market grown markedly in size - Fitch Ratings estimates that CDO sales in the country will increase 50% this year to more than $1.5 billion - Taiwanese insurers have also become increasingly sophisticated. Rather than being passive investors, they tend to work very closely with the