It's as if the holidays have come early for CDOs, with market constituents reporting outstanding levels of issuance both domestically and globally - and the year still has over a month to go.

Merrill Lynch data shows that U.S. cash CDOs are 90% ahead of last year's pace, recording a volume of $70.4 billion year-to-date. Merrill's Director Lang Gibson, in his most recent research report, noted that high-yield CLOs were the largest single subsector, growing 103% in 2004 to $23.7 billion in new issuance to date. Senior structured finance CBOs have grown 341% to $19.8 billion, said Gibson's Nov. 10 report, but by Merrill's count U.S. funded synthetic volume is down 54% for the year, presumably due to an absence of U.S. balance sheet deals and historically tight spreads this year.

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