CDO-Squared is a collateralized debt obligations backed primarily by the tranches issued by other CDOs. These instruments became popular before the financial crisis of 2007–08. There were 36 CDO-Squared deals made in 2005, 48 in 2006 and 41 in 2007. Merrill Lynch was a big producer, creating and selling 11 of them.
The collapse of the market for collateralized debt obligations and CDO-Squared contributed to the 2008 subprime mortgage crisis. Goldman Sachs appears to be the last bank to hold CDOs-Squared, holding $50 million in June 2018.
- ^“CDOs-Squared Demystified” (PDF). Nomura Fixed Income Research. 2005. Retrieved 2018-10-04.
- ^The Financial Crisis Inquiry Report, 2011, p.203
- ^“Collateralized Debt Obligation Squared – CDO-Squared”. Investopedia. Retrieved 2018-10-04.
- ^Woodall, Louie (2018-10-03). “Goldman Sachs is last major bank holding CDO squared”. Risk Quantum.