Last week's public rebuttal from AIG regarding the infamous Hollywood Funding deals (see ASR 3/19/01, p.1) put Credit Suisse First Boston directly in the line of fire as the sole structurer and underwriter on the troubled transactions; but the thicket of facts surrounding the controversy has gotten even more dense.

Observers have pointed out that CSFB was not only placement agent, but also a significant stakeholder in Quadrant Capital's structured investment vehicle (SIV), Asset Backed Capital (ABC), which was the largest investor in the Hollywood Funding deals. In fact, along with BGB Bank, CSFB is one of the largest equity holders of Quadrant's SIV. This means that all large purchases for the SIV are thoroughly reviewed by the bank, and CSFB, as an "equity enhancer," has significant vetoing power over the bonds placed into the vehicle, a source noted.

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