Wholesale Facilities and Cdo's.
In finance, a Collateralized Debt Obligation (CDO) is a type of structured financial product that pools together various debt obligations, such as loans and bonds, and repackages them into new securities that are sold to investors. These new securities are then sliced into different tranches, each with varying levels of risk and return.
The key considerations are!
- How to structure a Wholesale Facility prior to Securitization of the underlying assets.
- The transfer into Collateralized Debt Obligation.
- Maintaining some of the margin income (which is healthy).
- The main difference between a Synthetic CDO and a Cash CDO lies in their underlying assets. A cash CDO buys and owns physical assets like bonds and loans, while a synthetic CDO uses credit derivatives, primarily Credit Default Swaps (CDS), to create the same credit risk exposure without actually owning the assets.
SYNTHETIC COLLATERALZIED DEBT OBLIGATIONS.
In a simple synthetic securitization transaction, the Originator (the “Protection Buyer”) enters into a single CDS on the underlying reference portfolio as a whole or a series of CDS with the SSPE (the “Protection Seller”). In the event of a default or any other credit event affecting the reference portfolio, the Protection Seller will pay an amount to the Protection Buyer. In return for the transfer of the credit risk, the Protection Buyer will pay a fixed amount upfront—the premium—to the Protection Seller on a quarterly or yearly basis over the life of the CDS.
Wholesale facilities.
Contact Us.
ADDRESSes.
South Africa.
ENS Lawyers (South Africa).
Australia.
C/o Stockley Pagano Lawyers
Level 1, F3, The Precinct,
12 Browning Street
South Brisbane
Queensland
Australia
4101
CONTACT NUMBERs.
CALLS WILL ONLY BE ANSWERED BETWEEN 10AM AND 3PM MONDAY TO FRIDAY.
South Africa.
+27 (0) 604783357
Australia.
+61 (7) 3556 7955
