‘Explosive Growth’ for Synthetic CDO Securitizations

Synthetic CDO securitizations are experiencing explosive growth in the European market, according to Perry Inglis, managing director at Standard & Poor’s European Structured Finance Ratings group. Opening Standard & Poor’s annual global CDO conference in London, Inglis showed that the number of synthetic transactions being publicly rated increased dramatically between 2001 and 2002 and also between the first quarter of this year and the same period a year earlier. ‘Not only has the number of publicly rated synthetic transactions in Europe increased but the share of synthetic transactions of all CDO transactions has increased too,’ he explained. ‘Forty-eight synthetic CDOs were publicly rated in 2002 versus 17 in 2001 taking the share of these types of CDOs to 69 per cent from 40 per cent, while 34 have already been publicly rated in the first quarter of 2003 taking the share up to 94 per cent for the quarter.’


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