CDOs/CLOs

auto ABS 10% credit card ABS 8% catatrophe bonds 0% enterprise finance 0% equipment ABS 2% real estate ABS 70% structured settlements 0% student loan ABS 8% trade receivables 1% utilities ABS 0%

The U.S. ABS market spent a lot of time in 2006 absorbing major shocks, whether it was sweeping reforms for disclosure under Regulation AB, or changes to the Higher Education Act. Next year, according to several market players, the asset-backed securitization business will deliver a few punches of its own.

The U.S. CDO sector, fueled by residential mortgage and leveraged loan collateral, grew by leaps and bounds in 2006 to an estimated $480 billion - posting a gain of roughly 57% over last year and establishing itself as a staple within fixed income.

Calyon last week announced plans to grow its global CDO staff by one-third. The news came amid a shake-up that left the investment bank without several key members of its U.S. CDO team, including cash CDO head Alexander Rekeda.

Back in January, CapitalSource made its REIT status official, and thus made a lot of progress toward lowering its cost of funds and separating its real estate securitization activities from the rest of its securitization program. After pricing the CapitalSource Real Estate Loan Trust 2006-A just over a week ago, the separation is complete.

Tis the season to be ... shopping,' and not to be outdone by mere retailers this time of year, credit card ABS issuers rolled out the merchandise for their customers.

Life settlement ABS deals have been gaining traction in the securitization market in recent years, but some experts worry that recent proposals by the National Association of Insurance Commissioners (NAIC) will restrict the flow of underlying assets for premium financings, which fall under the same category, and cause that market to slip.

Mizuho Securities USA is positioning itself to become a familiar name in U.S. CDO-ville, with former Calyon cash CDO head Alexander Rekeda leading the Japanese bank's foray into CDO issuance out of New York. Rekeda was a driving force behind Calyon's growth as a U.S. CDO underwriter, according to Mizuho. Now as Mizuho's head of U.S. structured credit, Americas, Rekeda said the company's sizable balance sheet, its flexibility and its presence as a global distributor position the bank for growth within the sector.

The subprime RMBS market in 2006 arguably boiled down to a game of tug-of-war. On one side, hedge funds were eager to capitalize on a perceived gloom-and-doom scenario fraught with a busted housing bubble and empty-pocketed subprime borrowers. CDO managers, ever the real estate bulls, were on the other. And while these two sides are expected to continue their dance of supply and demand through yearend, a crop of subprime lenders - no longer able to carry the weight of investor buy-back requests - appeared to become the losers, at least for now.

Tom Finke is used to juggling multiple responsibilities. Not only at the office, with eight CLOs currently under management, but also at home keeping track of five kids. Though he is highly organized during the week, come Friday afternoon, Finke turns the reigns over to his wife, Heather, who arranges his soccer, basketball, baseball, birthday party and play date carpool agenda. And don't worry about his personal health. "With five kids there is no lack of physical activity," he said.