Thursday, August 9, 2007

A CDO is a collection of loans, mortgages and other obligations to pay

Four CDOs With Subprime Loans May Have Ratings Cut (Update2)

June 22 (Bloomberg) -- Four collateralized debt obligations worth about $3.1 billion and containing subprime mortgages from 2006, the kind that resulted in losses to two Bear Stearns Cos. hedge funds, may have their credit ratings cut by Fitch Ratings. The CDOs are the $288 million Trainer Wortham First Republic CBO III issued in 2003 and managed by Trainer Wortham & Co.; the $400 million ACA ABS 2003-1 and $725 million ACA ABS 2003-2, both issued in 2003 and managed by ACA Management LLC; and the $1.7 billion Ipswich Street CDO Ltd. issued last year and managed by MFS Investment Management, New York-based Fitch Ratings said in separate statements today

Posted by lvmreader @ 08:13 PM (444 views)
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6 thoughts on “A CDO is a collection of loans, mortgages and other obligations to pay

  • japanese uncle says:

    CDO=Criminal Defrauding Obliteration

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  • @Japanese Uncle

    Great spot. And all too true.

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  • @Japanese Uncle
    Do you know if these instruments were used in Japan in the late 80s at all?

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  • Note that the UBS analyst says;

    “We will see additional forced selling of CDOs when downgrades eventually occur,” Lucas wrote. “Some downgrades and sales will occur this year; some may not happen for two years.”

    Does this mean the sucker clients have to keep paying fees at the original amphetamine induced valuation until the game is busted?

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  • japanese uncle says:

    Ivmreader;

    As far as I recall there was property-related debt obligation in then Japan, but it did not involve this level of ‘slicing and dicing’.

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  • dohousescrashinthewoods says:

    I imagine we haven’t seen this level of leverage before either?
    If so, the shakeout will be multiplied.

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