Investors say that Cairn – an asset manager set up by former JPMorgan banker Tim Frost – believes that it can add value by managing the roll, and by not being fully levered at launch. The early versions of CPDOs start with 15 times leverage. The concern of some is that when the credit market deteriorates there could be substantial mark-to-market downside. These deals should perform fine in a mean-reverting scenario but might not otherwise.
Access this research
Enter your work email address to sign in or check whether your organisation already has access to Euromoney.
