Moving up

Moving up

Previous Story       Next Story

Portfolio switches gain popularity

As rumours intensify about whether S&P and Moody's will tighten their corporate CDO methodologies, further CSO restructuring activity has emerged (see SCI issue 89). But downgrade fears aren't the only driver: investors are switching into more senior tranches as a relative value play.

Technical dislocation of senior IG tranches provides an opportunity for investors already long legacy mezzanine tranches to switch into more senior tranches to take advantage of the attractive relative value between the two, confirms Michael Hampden-Turner, structured credit strategist at Citi.

Already registered?

Not yet registered? Join today to access SCI Content.