Hi all!
Something that bugs my head for quite a while:
Is there a sustainable difference between a Credit Linked Note and what is calles a synthetic CDO? In both structures, credit portfolios remain at the orginating bank, risk is transfered via Credit Default Swaps from the originating bank to the SPV. The SPV sells tranches to investors and buys risk free bonds as collateral for the CDS!
Thats the same for CLN and for synthetic CDO, isn't it? Or am I not getting it?
Thank you for your help!
Andi
Something that bugs my head for quite a while:
Is there a sustainable difference between a Credit Linked Note and what is calles a synthetic CDO? In both structures, credit portfolios remain at the orginating bank, risk is transfered via Credit Default Swaps from the originating bank to the SPV. The SPV sells tranches to investors and buys risk free bonds as collateral for the CDS!
Thats the same for CLN and for synthetic CDO, isn't it? Or am I not getting it?
Thank you for your help!
Andi
