Moody's Investor Services' coup in defining the methodology for rating collateralised debt obligations (CDOs) backed by equity default swaps (EDSs) will stand the credit rating agency in good stead if appetite for the instruments picks up as expected.

Paul Mazataud, head of European CDOs at Moody's in Paris, said the agency was approached by several banks interested in doing similar transactions last year, and had since worked on the methodology. He said: "Now that we have developed our rating methodology, we have received lots of enquiries. We believe there will be many other transactions this year and more banks will get involved in this market."