TY  - JOUR
AB  - The case introduces students to the nature of collateralized debt obligations (CDO) and the CDO origination process, with emphasis on the corporate structure of the special purpose vehicles, cash flows to various CDO tranches, and motivation behind CDO origination. Students will learn to quantitatively evaluate the risk-return profile of CDO tranches with emphasis on the equity tranche (also known as “toxic waste”). This is ideal for MBA and advanced undergraduate level courses on financial markets, financial institutions, and investments. In the case, an associate at the Debt Capital Markets desk of Lehman Brothers prepares a CDO issuance for Western Asset. Western Asset had been contacted by a group of commercial banks eager to sell senior secured bank loans and high-yield corporate bonds to lower their capital requirements and free up capital for additional lending.
VL  - 
IS  - 
SN  - 2474-7890
DO  - 10.1108/case.darden.2016.000349
UR  - https://doi.org/10.1108/case.darden.2016.000349
AU  - Loutskina Elena
AU  - Prabhu Rahul
PY  - 2017
Y1  - 2017/01/01
TI  - Western Asset Arbitrage
T2  - Darden Business Publishing Cases
PB  - University of Virginia Darden School Foundation
SP  - 1
EP  - 18
Y2  - 2024/04/25
ER  -