(Reuters) - While there are many kinds of debt used as collateral, the
surge in subprime bonds as a percentage of total ABS has led to
their domination in many CDOs. Investors watching the prolonged
U.S. housing slump cause rising delinquencies and losses on the
ABS expect CDO values and ratings will soon be affected.
Losses at two Bear Stearns Cos. hedge funds after
bad bets on subprime came to a head in June as bank creditors
tried to extricate their investments in the fund. Most of the
funds' CDO assets put up for sale never found buyers at prices
acceptable to the banks, fueling speculation that ABS CDOs
would suffer widespread markdowns, sources said.
Read more at Reuters.com Bonds News
surge in subprime bonds as a percentage of total ABS has led to
their domination in many CDOs. Investors watching the prolonged
U.S. housing slump cause rising delinquencies and losses on the
ABS expect CDO values and ratings will soon be affected.
Losses at two Bear Stearns Cos. hedge funds after
bad bets on subprime came to a head in June as bank creditors
tried to extricate their investments in the fund. Most of the
funds' CDO assets put up for sale never found buyers at prices
acceptable to the banks, fueling speculation that ABS CDOs
would suffer widespread markdowns, sources said.
Read more at Reuters.com Bonds News
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