The future of CDOs?

With the latest mass downgrade by Standard & Poor's of many mortgage-backed bonds, you have to wonder how this will affect collateralized debt obligations. It may put more pressure on some, and may even lead to some downgrades of CDOs themselves. At this point, you have to wonder about the future of CDOs. Short-term, there does not seem to be a reflation in the works. CLOs seem to be faring better. Financial News Online notes that issuance of asset-backed CDOs has really plunged. But the CDO will endure in some form. Other forms of credit are faring much better, and we'll continue to see CDOs that invest in other securities. Which brings us back to the question we posed a while back: What's the next big thing in structured finance?   

For more:
- here's the Financial News Online article

Related articles:
- CDOs continue to lag
- Something wrong with CDO models?
- CLO market stages a recovery
- Perspective on the CLO slowdown

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