CDOs/CLOs

Bankrupt bond insurer Ambac Financial Group had a net loss of $963 million in the fourth quarter of 2011.

The current buoyancy underlying the U.S. CLO market can be attributed to a number of issuance friendly factors, not the least of which is significant interest from new buyers, market participants say.

In competitive sports, being first is always the goal. But the distance between the U.S. — at the head of the pack — and the rest of the world in crafting financial reforms is becoming a major hurdle for implementing the Dodd-Frank Act.

A federal judge declined yesterday to dismiss charges that Barclays Capital packed a CDO it sold to Eastern Financial Florida Credit Union with junk, hastening the demise of the one-time $2.4 billion credit union, the biggest natural person credit union failure ever.

Citigroup has sold a $360.8 million CLO for Babson Capital Management, according to people with knowledge of the deal.

According to Leveraged Commentary & Data (LCD), a unit of Standard & Poor's, leveraged loan issuance is down by half versus last year, which S&P analysts said is potential constraint for CLO issuance.

In one of the most ambitious suits of its kind so far, Space Coast Credit Union has filed suit against several investment banks and rating agencies for the sale of $150 million of CDOs to Eastern Financial Florida Credit Union, the huge Florida credit union that failed in 2009 then was acquired by Space Coast.

Ongoing pressure on the credit ratings of some of the largest financial institutions could result in a minor shakeup in the ranks of CLO trustees.

The Carlyle Group is planning a $494.2 million CLO. The deal, dubbed Carlyle Global Market Strategies CLO 2012-1, would be the private equity firm’s thirty-third, and its first new issue for 2012. It is an arbitrage cash flow CLO with a four-year reinvestment period, scheduled to end in April 2016, according to a presale report by Fitch Ratings.