Originally published in Asset Securitization
Report, October 2011
Introduction
On the long and winding road to recovery for structured
products, 2011 marks a year of modest improvement in the CLO space.
While storm clouds and speed bumps continue to loom on the horizon
in the form of unpredictable regulatory developments, a weakening
economy and European contagion, it is becoming more evident that a
market whose very existence was once threatened to be subsumed is
reemerging from the ashes of the recent financial crisis.
Progress
Activity in the Rule 144A/Reg S CLO space continued its rebound
in 2011 with approximately $10 billion in closed or
projected-to-close deal volume. This is up from roughly $5 billion
in 2010, but on the low end of the range analysts had predicted.
Throughout the year, CLO liability spreads have continued on a
downward march (with some recent hiccups) and the investor base for
all tranches of the capital structure (including, in
