Details Emerge from CDO Settlement

Local councils that invested in supposedly secure collateralised debt obligations prior to the GFC and saw them implode when credit markets collapsed, have reached settlements with the administrators of Oakvale Treasury – one of the companies that sold them. The settlements are confidential but some light is being shed on them as councils update their financial accounts. Oakvale along with Lehman Brothers were active sellers of CDOs largely on the basis of supportive credit ratings and high yields. This turned out to be a false premise as the assets at the heart of the some CDOs turned sour when the US housing bubble collapsed in 2007/2008.