April 2003
Market dislocation boosts CDO trading
The lack of real-time information has always meant
that trading CDOs has never been for the faint of heart.
Goldman Sachs led the charge to improve the situation last
summer by making data on all its deals available to investors
on data service provider Intex. Three other underwriters have
followed suit.
It's a start, but what has acted as a real boon to trading CDOs
is last year's deterioration in credit prices. For some investors,
it's an opportunity too good to pass up.
"Secondary trading really has picked up, especially for senior
pieces," says Greg Mount, global head of CDOs at Goldman Sachs.
Several factors are driving this. First, there are investors
getting out of the market, because they have been burnt or because,
as Mount says: "They are concerned that under the FASB rule Fin 46
they will have...
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