Synthetic restructuring a question of price

Restructuring of synthetic structures basically boils down to shedding all or part of the exposure in order to increase the likelihood of return.

According to Soren Willemann and Matthew Leeming, analysts at Barclays Capital, investors that want to unwind synthetic CDO portfolios face essentially three options. They can unwind the structure and use the proceeds to add subordination to the remaining investment, sell the principal-only part of the CDO and use the proceeds to increase the interest-only coupon (or the reverse) or sell the CDO and use the proceeds to buy index products with the same notional exposure.