A singular success
The Parmalat accounting fraud has resulted in numerous synthetic CDOs with exposure to the Italian dairy producer being placed on review for downgrade. But single-tranche CDOs seem to have escaped the worst of the damage. Rachel Wolcott reports
Last year’s newcomer to the collateralized debt obligation market—the single-tranche CDO—may prove to be the most resilient of its breed, as the fallout from Parmalat’s default trickles through the synthetic CDO market, triggering downgrades galore.
Most single-tranche deals are transacted privately between collateral managers and a single investor, and have a greater capability of making substitutions in the reference pool. These deals are considered easier to restructure in the wake of a
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