September, the hallmark homestretch, is underway and the forces of the CDO market gather together in two weeks for the Bond Market Association's CDO Committee Conference. Considering how these instruments once perched on the brink of disaster, thanks to skyrocketing downgrades, there is no shortage of topics up for discussion.
Customized CDO vehicles and correlation trading desks reportedly received larger capital commitments this year, and the secondary market saw its first sizeable chunk of trading activity. With downgrades levels petering out in the first quarter, and stronger economic indicators emerging, the structured finance market looks to the Sept. 23 meeting to create definitive answers. How has this year's CDO harvest fared? How far has the credit cycle churned? How much should be allocated for collateralized debt obligations in 2004?