What are you looking for?

Bauman, Joe

Bauman, Joe

PRIME Fellow

The legal and structural aspects of credit derivative operating companies

Research Question

Why were CDPCs able to survive the disruptions of the 2007-2008 global financial crisis and achieve “soft landings” without incurring losses for key stakeholder groups while other similarly structured and rated credit risk taking companies and investment vehicles could not survive the market turbulence with the result of significant financial losses for their stakeholders?

Project Description

The research will entail a thorough review of the legal, corporate, and capital structure of CDPCs, the analytical basis of the CDPC public ratings awarded by the rating agencies, and an examination of the risks created by their portfolio positions. The research will also examine the events that stressed the abilities of these companies to survive the financial crisis, and the reasons that they did. Attention will be given to issues arising from the termination of contracts, resolution of transaction disputes, wind-down processes, and relationships between stakeholders.

This history will be contrasted to that of other similarly structured investment vehicles that, although holding the same public ratings, could not survive the stresses of the financial crisis.