With the increasing number of defaults that the market has seen over the last year, analysts say that the first-loss piece in older collateralized bond obligations have taken a direct hit, prompting market players to be more cautious with new deals coming to market.

The higher number of defaults is a greater concern for CBOs rather than collatarized loan obligations (CLOs) because bank loans have a higher recovery rate than bonds.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.