Tracking the performance of structured products is a complex task. Underlying each security is exposure to hundreds of credits, each with its own unique credit risk. In addition to tracking the performance of the underlying credits, structured product surveillance entails monitoring collateral and structural test compliance.
The ability to track the ongoing performance of structured products is critical. In some cases, deteriorating credit quality can lead to an Event of Default. It is important to have a constant awareness of the performance of the underlying collateral pool as well as its effects on the value of the investment.
Black Swan Consulting can assist in setting up surveillance processes that measure the ongoing performance data required to take preemptive action before significant cash flow deterioration begins.