Hints and tips:
...That’s nothing new – as shown by China’s forays last year into what looked like CDOs containing a load of junk debt packaged up into AAA-rated bonds....
...This method of funding helps spread the credit risks to investors, with a government backstop. So economically, it is good news....
...The problem was one of funding and leverage. Broker-dealers had been relying on the vast – but very skittish – wholesale funding and “repo” markets to raise enormous amounts of financing....
...Fear that started with problems in subprime and CDOs of ABS rapidly infected many other asset classes. ABCP is a prime example. There are, of course, eerie echoes in the MF Global bankruptcy....
...– FT Alphaville Eurozone CDO – it’s triple-A time – FT Alphaville...
...This goes down particularly well with taxpayers who are funding the whole enterprise. The policy is credible....
...Then the great 2007-2008 credit market implosion (CDOs, CDOs of CDOs, all that jazz) happened....
...it wasn’t for ECB intervention funding would have been prohibitively expensive....
...Technically, we see very little difference between these and senior CDO tranches, yet this one structure alone would have a size larger than the whole of the existing CLO market....
...and take refuge, though; Credit Suisse’s Andrew Garthwaite (my apologies for previously assigning incorrect authorship) has cogently assessed the possible scenarios should the senior tranche of the ‘EFSF CDO...
...the IMF is discussed as a possible participant, it appears highly unlikely that they could enter into this arrangement themselves given the relative subordination of all SPIV claims (which is a form of CDO...
...– FT Alphaville (2008 – Plus ça change) S&P’s CDO rating methodology is unpatriotic, outrage du jour – FT Alphaville (2009 - Plus ça change)...
...Quick background — the case involves two Goldman-constructed synthetic CDOs — Hudson Mezzanine Funding 2006-1 Ltd and Hudson Mezzanine Funding 2006-1 Corp., already the subject of an SEC investigation announced...
...And on that basis the CDOs most likely to “infect the rest of the network if they contain failed securities [are] GSC ABS CDO 2006-2 LTD or West Trade Funding CDO I.”...
...That top-tier rating will help keep the EFSF’s funding costs low, but it does come at a price....
...But the EFSF’s structure raises significant doubts about its creditworthiness and funding arrangements....
...Arosa Funding Ltd 2005-5 for instance, probably, like its Morgan Stanley-arranged predecessor, referenced a number of investment-grade corporate credits....
...Rhineland Funding, the ABCP conduit which financed IKB’s acquisition of Abacus, in addition to many other subprime CDOs, has also resurfaced....
...That technique essentially involves employing a Re-REMIC strategy typically used for CMBS-backed CDOs, to repackage a CDO backed by leveraged loans – a CLO....
...’s Knollwood CDO Ltd. and Kent Funding II, managed by Declaration in McLean, Virginia, Wachovia analysts wrote yesterday....
...Write-downs on CDO investments will come to Y9bn and losses related to the failed Lehman Brothers will total Y9.6bn....
...Without it, banks were expected to have to take billions of dollars of writedowns on insured toxic assets, and thousands of small US cities and municipal entities would be deprived of cheap funding....
...Second, with bank funding tight and capital under pressure, one of the only ways to keep corporate clients in funding is for banks to pass on risk through derivatives....
...“Securitisation has been such an essential source of funding for the entire economy that the consequences of its breakdown are potentially so large it is still hard to quantify,” said Greg Peters, head of...
...- And collapsing CDO issuance. FT Alphaville will be back on Tuesday, following the Bank Holiday weekend. —...
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