Hi, Can anyone please help me with the CBO structure ? How they are formed and structured and also apart from this is there any other method with the help of which pool of bonds can be packaged & reissued as bonds again. Thanks.
Company —> Creates Special Purpose Vehicle CBO/CDO/CLO ------> Vehicle Issues Debt/Equity -----------> Investor Buys Debt Equity ------------> SPV used investor cash to buy and maintain loans/debt
Also check out the following book: Collateralized Debt Obligations: Structures and Analysis, 2nd Edition (Wiley Finance) by Douglas J. Lucas, Laurie S. Goodman, and Frank J. Fabozzi I used it late last year when trying to get my arms around some of this stuff. Travakoli also has a book out, but have not used it. Heard it’s not bad.
I pinch off a steaming loaf, issue you some paper secured by said loaf, pay SP to stamp it AAA, everybody wins as along as steaming loaf prices increase 15% PA.
lol - loafs tend not to go up forever