Sub-prime Lending (Commercial)
2/27/2008 11:39:13 AM EST
Credit Fears Spread
LexisNexis Quality & Training/LexisNexis Law Center Staff
From this article in the Wall Street Journal by CARRICK MOLLENKAMP and SERENA NG comes word that the fear and havoc caused by the collapse of the subprime mortgage market is even being felt in the rarefied atmosphere of synthetic collateralized-debt obligations (CDOs), and constant-proportion debt obligations (CPDOs). CDOs and CDPOs are investment vehicles that pool credit-default swap contacts on corporate bonds. Credit-default swap contacts act as insurance against default on corporate bonds. Corporate bonds issued by major corporations are considered safe because a large corporation is not likely to go under even if there is a serious recession. Create an account or login to post comments.