CDO-Squared
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CDO-Squared is a collateralized debt obligation backed primarily by the tranches issued by other CDOs.[1] These instruments became popular before the financial crisis of 2007–08. There were 36 CDO-Squared deals made in 2005, 48 in 2006 and 41 in 2007. Merrill Lynch was a big producer, creating and selling 11 of them.[2]
The collapse of the market for collateralized debt obligations and CDO-Squared contributed to the 2008 subprime mortgage crisis.[3] Goldman Sachs appears to be the last bank to hold CDOs-Squared, holding $50 million (~$59.8 million in 2023) in June 2018.[4]
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References[edit]
- ^ "CDOs-Squared Demystified" (PDF). Nomura Fixed Income Research. 2005. Retrieved 2018-10-04.
- ^ The Financial Crisis Inquiry Report, 2011, p.203
- ^ "Collateralized Debt Obligation Squared - CDO-Squared". Investopedia. Retrieved 2018-10-04.
- ^ Woodall, Louie (2018-10-03). "Goldman Sachs is last major bank holding CDO squared". Risk Quantum.
- ^ "CDO Library : Financial Crisis Inquiry Commission".
Sources[edit]
- Adams, Andrew; Bhatt, Rajiv; Clunie, James (1 June 2009). "The Risks in CDO-Squared Structures" (PDF). Multinational Finance Journal. 13 (1/2): 55–74. doi:10.17578/13-1/2-3. ISSN 1096-1879.
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