Cash vs Synthetic Arbitrage CDOs: What's the Difference?
Book: Structured Finance and Collateralized Debt Obligations | Author: Janet M. Tavakoli | Publisher: John Wiley & Sons (2008) | ISBN: 978-0-470-44344-6
Cds
Credit Derivatives and Default Swaps: The Basics
Credit derivatives are where Chapter 3 begins, and they’re where the CDO story gets complicated. These instruments – primarily credit default swaps – turned the credit market from a buy-and-hold business into a trading business. They made the CDO market possible at the scale it reached. They also introduced risks that many participants didn’t understand.
Credit Derivatives and Credit-Linked Notes: CDS, Portfolio Products, and Funded Credit Protection
Book: Structured Finance and Insurance: The ART of Managing Capital and Risk Author: Christopher L. Culp Publisher: Wiley Finance, 2006 ISBN: 978-0-471-70631-1
Credit Derivatives: CDS, CDOs, and the Products That Blew Up
If you hold a bond and the issuer might default, you want insurance. That is the basic idea behind credit derivatives. You pay someone a regular premium, and if the bad thing happens, they pay you. Chapter 41 of Wilmott’s book walks through the main types of credit derivatives, from simple default swaps to the multi-name products that helped blow up the global financial system in 2008.