Managed synthetic CDOs prove their worth
European managed synthetic collateralised debt obligation (CDO) tranches have historically suffered fewer downgrades than their static counterparts, according to data from specialist rating agency Derivative Fitch. "Every year we see a smaller percentage of downgrades in managed versus static European synthetic CDOs," says the agency.
In 2006, the proportions of Fitch-rated managed and static synthetic CDO tranches downgraded were 2.75% and 8.01% respectively. From 2002 to 2006, the proportion of
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