Coming off a strong January for new deals, and encouraged by improved economic news, sentiment in the U.S. CLO market has taken a giddy skip from guarded optimism to bullishness — a little too bullish, according to some market participants.

True, there have been more than $2 billion in new CLOs, via six deals, priced since the beginning of the year, almost double last year’s level at this time, according to Standard & Poor’s. And there appears to be a healthy pipeline of new transactions, with analysts from Moody’s Investors Service putting the number of deals far enough along to reach roughly nine. Moreover, primary issuance spreads have narrowed relative to late-2011 levels, to around Libor plus 150 basis points, from the Libor plus 160-165 basis point range.

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