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What is structural value and why is it important in structured products?

April 26, 2017products structural structured value

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What is structural value and why is it important in structured products?

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Structural value is one of the most important and overlooked parts of a structured credit investment, especially during stressed markets. Structure determines the allocation of cash that is received from the pool of credit assets, and sometimes certain investors are cut out of the payments. Understanding how that allocation impacts an investment can provide comfort, opportunity, or a warning.