Several factors have led to the significant increase in CDO issuance, including the relatively strong corporate performance and a large supply of loans, along with the increasing size of the investor base and the flexibility provided by synthetic structures, according to the Bond Market Association. The BMA made this statement last week in conjunction with the release of its quarterly global CDO issuance data.

Global CDO issuance through 3Q06, at $322 billion, has exceeded full year 2005 issuance by 20%. Issuance in 3Q06, at $117.8 billion, has also exceeded issuance in the third quarter of 2006 by 30%, the BMA reported.

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