"Oil plunge sparks US credit market fears"

Former Alphavillein* Tracy Alloway now writing for the paper.
From the Financial Times:

Investors in securitised packages of loans are scrambling to determine how much the complex products are exposed to plunging oil prices as turmoil in the US credit markets spreads.

The price of oil has sunk almost 50 per cent since June with West Texas Intermediate crude slipping below $60 a barrel last week and Brent falling below the same level on Tuesday.

While the crude price has had a pronounced effect on the prices of corporate bonds sold by junk-rated companies, and to a lesser degree the investment-grade bonds issued by firms with stronger balance sheets, there are signs that it is beginning to slip into more esoteric corners of the credit market.

Investors have been rushing to analyse their holdings of collateralised loan obligations. CLOs are a type of bond that bundles together cash flows from loans made to highly indebted companies and then slices them according to risk.

Commercial mortgage-backed securities, which pool loans secured by commercial properties such as offices and industrial facilities, are also under scrutiny. Some 25 CMBS deals worth $251m have loans on properties in the Bakken formation of North Dakota — where shale drillers have been scaling back — according to Morgan Stanley estimates....MUCH MORE

*For folks with better things to do than crack jokes with obscure Medieval refs the villein was a feudal  class ranking between a cotter and a thane who was basically a slave to a manor, or more usually, to the Lord of a manor, but free in other respects.

If you picture Alphaville as a village on a medieval manor, with Paul Murphy as laird and the writers as villeins-in-gross you come up with one of the strangest organizational charts you are likely to find and I'm not even going to get into what they do to poor Joseph Cotterill...