With a year of credit mishaps behind, the nascent mezzanine German SME CLO sector is seeing the first deal marketing in 2007 via HSBC Trinkaus & Burkhardt's HEAT Mezzanine -1 2007. Where the deal prices will tell the tale of where current investor sentiment is after last year's default debacle that placed a couple of structures in the firing zone.

"The degree of overlap is high within these structures," said Ganesh Rajendra, managing director and head of securitization research of Europe and Asia at Deutsche Bank. "It will be interesting to see if that is going to be priced in."

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