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What-if Scenario Analysis for Collateralized Debt Obligations

The Client:

Our client is a real estate investment firm that invests directly in commercial properties across the United States. 

Their Challenge:

A Collateralized Debt Obligation (CDO) asset manager needed to perform "what-if" scenario analysis on expected changes within the CDO portfolio. The asset manager needed to proactively manage the composition of the CDO portfolio, providing it with greater insight into future CDO performance.

The NorthBound Solution:

NBS also delivered a solution that automated the reconciliation process between the asset manager and the CDO trustee. This application immediately notified the user of any adverse performance metrics as well as discrepancies in data and calculations between the trustee's report and the information generated by the underlying servicing platform.

The Benefit:

The benefit of these solutions was in streamlining, automating and improving the integrity of the process to perform and test all CDO calculations. The result was a more comprehensive, efficient and auditable servicing platform. designed, developed and implemented a custom application that allowed this Collateralized Debt Obligation (CDO) asset manager to perform "what-if" scenario analysis on expected changes within the CDO portfolio. This application allowed the asset manager to proactively manage the composition of the CDO portfolio, providing it with greater insight into future CDO performance.