The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

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 to bring these assets onto their balance sheets. The ABS conduit vehicles especially are concerned about this."

A second reason for discounted prices is that some deals might now be lacking a manager, either effectively or in reality. "Some are being liquidated, some have had the manager thrown off the deal," says Mount. "And some, such as the 1997 vintage deals that have performed badly, are beyond their reinvestment period, or the managers have given up because their fees are subordinated and they're not getting paid any more."


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree