Indeed, many of the structures seemed to be created to satisfy investors' strong demand for securities that carried investment-grade ratings but that might provide slightly higher yields than other investment-grade securities, such as corporate bonds. In many cases, however, investors seem to have been attracted to these structured securities without a thorough understanding of the underlying risk profiles.
Although MBS and CDOs had been around for many years, the more recent structures were significantly different and more complex than their earlier counterparts. Investors' earlier experience with CDOs, for example, was mainly limited to cases in which primary securities, such as corporate bonds, business loans, or other simple securities, formed the underlying collateral.