Though securitisation has been in place in India over last 6 years or so, there has been no CDO/ CLO.There have been several loan sales by financial institutions.
ICICI’s CDO (roadshows started in Feb second week) is the first CDO/ CLO in India. Called Indian Corporation Collateralised Debt Obligation Fund. It is a balance sheet CDO, consisting of a pool of bonds, PTCs held by ICICI. Capital relief could not be the purpose: if capital regulations as in BIS are applied, the deal will lead to capital erosion.In terms of the distribution schedule, it is essentially a passthrough structure – reinvestments only if bondholders opt for growth plan. The case study talks about CDO and the first Indian CDO in brief … click here for details
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