Structured Finance and Collateralized Debt Obligations: New Developments in Cash and Synthetic Securitization / Edition 2

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The structured finance landscape has changed radically in the last several years, especially when it comes to collateralized debt obligations (CDOs). New technologies, tools, and products have opened the door to many profitable opportunities within this market, and an equal number of debacles have arisen due to misunderstandings, misuse, and outright fraud. In order to achieve success and use structured technology in a beneficial fashion's well as avoid potential pitfalls—you need to gain a firm understanding of how to operate within such a dynamic environment.

That's why financial expert Janet Tavakoli has created Structured Finance and Collateralized Debt Obligations, Second Edition. Filled with in-depth insights and practical advice, this updated guide provides you with everything you need to value structured financial products. Incorporating a comprehensive overview of the CDO market and the elements of structured finance amid recent developments, Tavakoli provides the substance necessary to evaluate structured products—while making clear that mechanical models most often used by institutions and professionals have critical shortcomings. The models, she asserts, will inevitably fail if one does not understand how to evaluate fundamental value and handle quality control.

Chapter by chapter, Tavakoli shares her extensive experiences in this field, as she explores important securitization topics, including cash versus synthetic arbitrage CDOs; recent changes in the CDS market posed by CDSs on asset-backed securities (CDSs of ABS); synthetic indexes; subprime and Alt-A securitization; the role of hedge funds in this arena; securitizations made possible by the emergence of the Euro; and much more.

Along the way, Tavakoli takes the time to detail the different types of products now available, highlight new hedging techniques, and outline various valuation and risk/return issues associated with investing in CDOs and synthetic CDOs. She also looks at some instances of fraud and what can be done to recognize and remedy such situations, and focuses on some gray areas of opportunity presented by today's structured products.

Written with the serious financial professional in mind, Structured Finance and Collateralized Debt Obligations, Second Edition skillfully puts this discipline in perspective. It sheds much-needed light on how existing structuring technology has benefited new markets and has the potential to create even better products—and it provides a clearer understanding of these products so that you can confidently participate in this market and make more-informed decisions within it.

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Product Details

  • ISBN-13: 9780470288948
  • Publisher: Wiley
  • Publication date: 9/16/2008
  • Series: Wiley Finance Series, #461
  • Edition description: New Edition
  • Edition number: 2
  • Pages: 480
  • Product dimensions: 6.40 (w) x 9.10 (h) x 1.60 (d)

Meet the Author

Janet M.Tavakoli is the President of Tavakoli Structured Finance, a Chicago-based consulting firm to financial institutions, institutional investors, and hedge funds. She gave advance warning of major collapses regarding Long-Term Capital Management, First Alliance Mortgage, the thrift industry, and the current credit bubble. Business-Week's profile called Tavakoli "The Cassandra of Credit Derivatives." She has over twenty years of experience trading, structuring, and marketing derivatives and structured products. Tavakoli is a former adjunct associate professor in the Finance Department of the University of Chicago's Graduate School of Business, where she taught derivatives. She is also the author of the first edition of Collateralized Debt Obligations and Structured Finance and Credit Derivatives and Synthetic Structures, now in its second edition. Tavakoli is frequently published and quoted in numerous financial publications including the Wall Street Journal, the Financial Times, BusinessWeek, Journal of Structured Finance, Derivatives Week, and many others. She also appears frequently on CNN, CNBC, CBS Evening News, Bloomberg TV, and First Business Morning News.

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Table of Contents


Acronym Key.

CHAPTER 1: Securitization Terminology.

CHAPTER 2: Structured Finance and Special Purpose Entities.

CHAPTER 3: Credit Derivatives and Total Rate of Return Swaps.

CHAPTER 4: CDOs and the Global Capital Markets.

CHAPTER 5: Risk and Valuation Issues.

CHAPTER 6: Early CDO Technology.

CHAPTER 7: Early Warning Commercial Financial Services.

CHAPTER 8: Subprime and Alt-A Mortgages: Collateral Damage.

CHAPTER 9: Cash versus Synthetic Arbitrage CDOs.

CHAPTER 10: CDO Equity Structures.

CHAPTER 11: CDO Managers.

CHAPTER 12: Balance-Sheet CLOs and CDOs.

CHAPTER 13: Super Senior Sophistry.

CHAPTER 14: Synthetics and Mark-to-Market Issues.

CHAPTER 15: Comments on Selected Structured Finance Products.

CHAPTER 16: Credit Funds.

CHAPTER 17: The Credit Crunch and CDOs.

CHAPTER 18: Future Developments in Structured Finance.

APPENDIX: Interesting Web Sites.



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