Posts tagged 'CPDOs'

Working together on the CPDO dream

In the prodigiously long and detailed judgement from Australia’s Federal Court on the CPDO affair, there is a story jumping out from behind the complexity of the product itself. It’s about the key role played by former Standard & Poor’s employees who had left the rating agency to go to banks to help structure these products. Read more

AAA ratings, alternative universes, and hindsight

Yes, it’s very bad for S&P. Australia’s federal court found that the ratings agency had misled local councils through assigning AAA credit ratings to CPDOs which it had failed to check properly.

But since this could well be a landmark case for credit ratings as causes of financial harm… Read more

Moody’s avoids prosecution, on a technicality…

A feather (of sorts) in the cap of one Sam Jones.

The young, former Alphavillain wrote this for us two years agoRead more

FT Alphaville exclusive: Moody’s error gave top ratings to debt products

Moody’s awarded incorrect triple A ratings to billions of dollars worth of a type of complex debt product due to a bug in its computer models, an Financial Times investigation has discovered.

Internal Moody’s documents seen by the FT show that some senior staff within the credit agency knew early in 2007 that products rated the previous year had received top-notch triple A ratings and that, after a computer coding error was corrected, their ratings should have been up to four notches lower. Read more

Moody’s errs in rating debt products

Moody’s incorrectly awarded triple-A ratings to billions of dollars worth of a type of complex debt product due to a bug in its computer models, an FT investigation has discovered. Internal Moody’s documents show that some senior staff within the credit agency knew early in 2007 that products rated the previous year had received top-notch triple A ratings and that, after a computer coding error was corrected, their ratings should have been up to four notches lower. Moody’s said it was “conducting a thorough review” of the rating of the product – constant proportion debt obligations – that appeared to promise investors very high returns with little risk. Read more background here.