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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area

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To: FHM who wrote (27082)	2/28/2007 1:44:59 PM
From: Crossy	Read Replies (1) of 37387

FHM, their exposure is soleily with "equity tranche" and only to the extent they participated. See, normally ACA doesn't own these CDOs, they only MANAGE them and get recurring fees as an asset manager. may I suggest to fire up the definition of CDOs, CLOs and the like. It's not easy as owning a portfolio of loans.. americanbanker.com there's a presentation available at the ACA website, albeit from Q3 - it should shed some light on this, too: media.corporate-ir.net Edit: I found it - slides 8-10 tell the story, still a tad "hidden" to the casual observer I guess This "equity tranches" are the lowest grade parts of any CDO structure. This tranche bears all the risk. ACA never took up more than 10% of an equity tranche and this year they took even less, usually 3-5%.. Slide 10 tells us that their exposure is $2-5m per transaction (I presume this is in the case of a 10% participation in the respective equity tranche) rgrds CROSSY

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