(Reuters) - Investors have been expecting downgrades on CDOs will
follow cuts to the underlying mortgage bonds that have been
mounting at a rapid pace this month. Mortgage bonds were
increasingly favored for yield in CDOs until last year as the
slumping U.S. housing market revealed unsound underwriting
practices and excessive credit.
CDOs are created by taking portions of debt securities and
packaging them into new bonds that are split into several
classes by degree of risk.
Read more at Reuters.com Bonds News
follow cuts to the underlying mortgage bonds that have been
mounting at a rapid pace this month. Mortgage bonds were
increasingly favored for yield in CDOs until last year as the
slumping U.S. housing market revealed unsound underwriting
practices and excessive credit.
CDOs are created by taking portions of debt securities and
packaging them into new bonds that are split into several
classes by degree of risk.
Read more at Reuters.com Bonds News
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