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Collateralized Debt Obligations and Structured Finance : New Developments in Cash and Synthetic Securitization
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Structured Finance and Collateralized Debt Obligations: New Developments in Cash and Synthetic Securitization (Wiley Finance)
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collateralized debt obligation FAQ
Collateralized debt obligations (CDOs) are a type of structured asset-backed security (ABS) whose value and payments are derived from a portfolio of fixed-income underlying assets. CDOs securities are split into different risk classes, or tranches, whereby
Collateralized debt obligations (CDOs) are a type of structured asset-backed security (ABS) whose value and payments are derived from a portfolio of fixed-income underlying assets. CDOs securities are split into different risk classes, or tranches, whereby
The short answer: CDOs are bonds whose principal is backed by a bunch of other debt such as a pool of mortgages, car loans, credit car balances, etc. The interest a buyer of these CDOs receives is based on the interest paid by the underlying debt.
That means you have promised the lender he can have something worth the amount of the loan if you don't pay the loan back.
Usually something like your IRA, real estate, your car, etc.
Usually something like your IRA, real estate, your car, etc.
OK, lets say 3 people, 1 rich, 1 middle class, and 1 poor, each borrow 100,000 to buy a home.
This is called a mortgage, and suppose each person agrees to pay the bank $1000 a month for the next 10 years (1000*12*10 = 120,000).
collateralized debt obligation news
Bank of America Said to Offer Initial Rate Guidance on CSAM CLO
Feb. 21 (Bloomberg) -- Bank of America Corp. has offered initial price guidance on the highest-rated portion of a $413 million collateralized loan obligation it is raising for Credit Suisse Asset Management, according to two people with knowledge of the deal.
The $252.5 million slice rated AAA by Standard & Poor’s may pay a rate of 135 basis points to 145 basis points more than the London interbank offered rate, said the people, who declined to be identified because the terms are private.
Source: BusinessWeek
TEXT-S&P on US synthetic CDOs after month-end review
OVERVIEW -- We placed our ratings on 16 tranches from 15 synthetic CDO transactions on CreditWatch positive. -- We placed our ratings on four tranches from three synthetic CDO transactions on CreditWatch negative. -- We affirmed our ratings on three tranches from two synthetic CDO transactions and removed them from CreditWatch with negative implications. NEW YORK (Standard & Poor's) Feb. 21, 2012--Standard & Poor's Ratings Services today placed its ratings on 16 tranches from 15 corporate-backed synthetic collateralized debt obligation (CDO) transactions on CreditWatch positive. At the same time, we placed our ratings on three tranches from two synthetic CDO transactions backed by commercial mortgage-backed securities (CMBS) and one tranche from one corporate-backed synthetic CDO transaction on CreditWatch negative. In addition, we affirmed our ratings on three tranches from two corporate-backed synthetic CDO transactions and removed them from CreditWatch negative. The rating actions followed our monthly review of U.S. synthetic CDO transactions (see list). The CreditWatch positive placements reflect seasoning of the transactions, rating stability of the obligors in the underlying reference portfolios over the past few months, and synthetic rated overcollateralization (SROC) ratios that increased above 100% at the next highest rating level. The CreditWatch negative placements reflect negative rating migration in the respective portfolios and SROC ratios that fell below 100% as of the January month-end run. The rating affirmations reflect overall stabilization of the credit quality of the underlying reference portfolio and SROC ratios that increased to or above 100%. STANDARD & POOR'S 17G-7 DISCLOSURE REPORT SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Rule applies to in-scope securities initially rated (including preliminary ratings) on or after Sept. 26, 2011. If applicable, the Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available atRELATED CRITERIA AND RESEARCH -- Global Structured Finance Scenario And Sensitivity Analysis: The Effects Of The Top Five Macroeconomic Factors, published Nov. 4, 2011 -- Revised Methodologies And Assumptions For Global Synthetic CDO Surveillance, published Sept. 30, 2010. -- Update To Global Methodologies And Assumptions For Corporate Cash Flow And Synthetic CDOs, published Sept. 17, 2009. -- General Criteria: Understanding Standard & Poor's Rating Definitions, published June 3, 2009. -- Methodology: Credit Stability Criteria, published on May 3, 2010. RATING ACTIONS Aphex Capital NSCR 2007-5 Ltd. Rating Class To From A-1FL CCC (sf)/Watch Neg CCC (sf) A-1FX CCC (sf)/Watch Neg CCC (sf) Credit Default Swap US$300 mil Morgan Stanley Capital Services Inc. - ESP Funding I Ltd. REF: NGNGX Rating Class To From Tranche BB-srb (sf)/Watch Pos BB-srb (sf) Credit Default Swap US$500 mil Credit Default Swap - CRA700386 Rating Class To From Swap AAsrp (sf)/Watch Pos AAsrp (sf) Credit Default Swap US$500 mil Credit Default Swap - CRA700396 Rating Class To From Swap AAsrp (sf)/Watch Pos AAsrp (sf) Credit Default Swap US$561.8 mil J.P. Morgan Chase Bank, N.A. - Lacrosse Financial Products LLC J17558 (SEQUOIA) Rating Class To From Tranche A-srp (sf)/Watch Pos A-srp (sf) Elva Funding PLC Series 2008-3 Rating Class To From Notes A- (sf)/Watch Pos A- (sf) Infinity SPC Ltd. US$25 mil Class B Floating Rate Notes ( CPORTS POTOMAC 2007-1) Rating Class To From B CCC- (sf)/Watch Pos CCC- (sf) Jupiter Finance Ltd. Series 2007-002 Rating Class To From Port CrLkd BB- (sf)/Watch Pos BB- (sf) Morgan Stanley ACES SPC Series 2007-6 Rating Class To From IIA BB- (sf)/Watch Pos BB- (sf) IIIA B (sf)/Watch Pos B (sf) Morgan Stanley ACES SPC Series 2007-8 Rating Class To From Senior BB (sf) BB (sf)/Watch Neg Morgan Stanley ACES SPC Series 2007-24 Rating Class To From E CCC- (sf)/Watch Pos CCC- (sf) Morgan Stanley Managed ACES SPC Series 2007-16 Rating Class To From IB BB- (sf)/Watch Pos BB- (sf) NOAJ CDO Ltd. Rating Class To From Series 1 BB- (sf)/Watch Pos BB- (sf) Obelisk Trust 2007-1-Sonoma Valley Rating Class To From A AA- (sf)/Watch Neg AA- (sf) REVE SPC EUR15 mil, JPY3 bil, US$81 mil REVE SPC Segregated Portfolio of Dryden XVII Notes Series 34, 36, 37, 38, 39, & 40 Rating Class To From Series 37 B- (sf) B- (sf)/Watch Neg Series 40 B (sf) B (sf)/Watch Neg STARTS (Cayman) Ltd. Series 2007-9 Rating Class To From Notes BB (sf)/Watch Pos BB (sf) STEERS Thayer Gate CDO Trust Series 2006-1 Rating Class To From Trust Cert B- (sf)/Watch Pos B- (sf) STEERS Thayer Gate CDO Trust Series 2006-2 Rating Class To From Trust Unit B- (sf)/Watch Pos B- (sf) STRATA 2006-35 Ltd. Rating Class To From Notes B (sf)/Watch Neg B (sf) Terra CDO SPC Ltd. 2008-1 Rating Class To From A-1 BB+ (sf)/Watch Pos BB+ (sf) We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Source: Reuters
Big Bailout Bounce for Zions: FBR
Source: TheStreet.com