Domestic bliss...at a price

CDO transactions denominated in Asian currencies are being shown to investors, and for those who cannot hold US dollar- or euro-denominated assets, these structures are particularly attractive. Yet how feasible are these deals? And are cash deals more attractive to investors than synthetic deals? By Aileen Saw

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Asian investors and asset managers have seen collateralised debt obligations (CDOs) in every asset class and structure: cash and synthetic, high yield and investment grade, various portfolio combinations, currency alternatives. Competition for innovation is fierce. Reception is varied.

When a new product comes to Asia, it is first introduced in US dollars. As investors become more familiar with a product, they begin to take on more risky asset classes and tranches. With increased exposure to

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