"Super-senior" Investors Begin to Flex Their Muscles

Financial Times - April 15, 2008

By Michael Mackenzie in New York

The collapse of the US subprime mortgage market has produced plenty of collateral damage, none more so than in the highly rated securities of structured credit vehicles.

"A lot of senior note holders did not do their job and ask for clarity on the documentation of deals."

"Super-senior tranches were billed as having zero principal risk,” says Ms Tavakoli.

[Ms. Tavakoli pointed out the significant risk in her 2003 book: Collateralized Debt Obligations & Structured Finance, John Wiley & Sons. The second edition retitled Structured Finance & Collateralized Debt Obligations will be released September 2008]

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