LONDON - Fitch Ratings opened its Global Credit Derivatives conference last week in London with a discussion among arrangers, investors and managers discussing their take on the growth prospects for synthetic CDOs in a tight spread environment.

According to the panelists, returns on investments were higher two years ago. By contrast, current market spreads have tightened to where investors are becoming reluctant to jump in. So before they buy into these types of CDOs, they are starting to want more information about CDO managers and how the synthetic structures would perform and evolve in an economic downturn.

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