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Bad Debt investment vehicles

Edge

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FASTLANE INSIDER
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Sep 20, 2007
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Does anyone know if there is such a thing as a pooled or structured vehicle for investing in bad debt? I understand that this type of vehicle exists for pooled mortgages, but I am specifically looking into unsecured debt.

I'm really looking to learn how the big I-Banks hedge their bad debt exposure. I know Goldman Sachs washed out most of their subprime mortgage debt because they were short a lot of mortgage debt contracts. Does this exist for other types of debt?

I'm guessing that it exists as a "SIV" that only the I-Banks sell to each other in unliquid markets, but I'd love to hear from anyone that knows anything else.
 

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OP
OP
Edge

Edge

Contributor
FASTLANE INSIDER
Summit Attendee
Sep 20, 2007
349
71
59
43
Kansas
CDS can hedge credit risk...
That's exactly the product i'm looking for. How do you trade this product? Do you have to be a broker dealer or a hedge fund? It's not something I can log on to IB and trade.
 

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