Small bank failures add to trups CDO loss tally, Fitch reports

The cumulative rate of defaults and deferrals in trups CDOs climbed by 1.6% to a combined 29.3% in March, according to a new report by Fitch. To date, 103 banks that are included in Fitch-rated trups CDOs have defaulted on these securities, while 330 are currently deferring.

The biggest default last month in terms of its impact on trups CDOs was that of MCB Financial Group, which is present in two deals with a total combined exposure of $10 million. The company is the parent company of McIntosh Commercial Bank, a small bank based in Georgia, which collapsed with $636 million of total assets. By contrast, February’s biggest default was the failure of La Jolla Bancorp, which hit six trups CDOs with a total exposure of $65 million.