Spread widening causes first CPDO unwind

risk-1207-02-gif

Massive spread widening in financial credits has resulted in the first forced unwind of a constant proportion debt obligation (CPDO), realising enormous losses for investors. The Series 103 Tyger notes, first issued by UBS at the start of July with a rating of Aaa from Moody's Investors Service, were downgraded to C on November 21 after the net asset value of the deal fell to 10%, causing the product to automatically liquidate.

Three further CPDOs issued by UBS were downgraded by Moody's to Baa2,

To continue reading...

You must be signed in to use this feature.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: