While some CDO managers appear to be doing a better job than others, investors have yet to demand a higher yield for a history of lackluster or poor performance, according to Standard and Poor's. By borrowing performance metrics most familiar to the bond world, the rating agency created a custom ABS benchmark and was able to find enough discrepancy in CDO performance to rank 25 collateral managers. However, the analysts emphasized that the results rank against only one benchmark, and are by no means comprehensive.
Even so, at least one ABS CDO manager is interested in using its S&P ranking - which at this point remains proprietary - as a selling point to potential investors, said S&P analyst John O'Brien. He said between 12 and 15 managers have contacted the rating agencies inquiring about obtaining a ranking as well. On a conference call held last week on the matter, an MBIA representative inquired about the identity of the top five managers, and a Radian Assurance Guaranty representative asked about the performance of first-time asset managers.