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Hedge funds eyeing small banks lead CDO revival

Stonecastle CDO is backed by subordinated debt from small community banks

EJF's Mr Friedman is putting together a sub-debt CDO which will be tied mostly to recently issued sub-debt of community banks.

New York

JOSHUA Siegel is bringing back one of the most toxic financial vehicles ever devised and arguing that this time, it is going to be different. His StoneCastle Financial is among the hedge funds that are reviving the collateralised debt obligation, or CDO.

CDOs stuffed with...

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