Daiwa CEO given Zest for life

Collateralized equity obligations come of age as Daiwa announces Ñ23.4 billion deal.

Daiwa Securities has launched the world's first public, rated collateralized equity obligations. So-called CEOs are being touted as the perfect solution for investors looking for a higher yielding alternative to collateralized debt obligations as CDOs are getting tougher to structure in an environment of tightening spreads and shrinking liquid credits.

It has long been thought that CEOs could fill the gap but few bankers thought there were sufficient investors comfortable enough to absorb a substantial deal. Most arrangers have therefore sought to soften attitudes and familiarize investors through hybrid deals, combining small equity portions with traditional CDO structures, or small deals placed with single investors. That tactic could be set...

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