CDO heavyweight Merrill Lynch once again dominated U.S. CDO underwriting in 2006. The firm brought not only the greatest dollar volume in deals to the market, but also led innovation throughout the sector's record-setting year. Through a combination of landing key clients, new hires and high demand, the investment bank underwrote 65 deals last year totaling more than $50 billion and a 15% market share, according to Thomson Financial league table data.

To handle the volume, Merrill increased its global CDO banking and structuring team by more than 50% last year compared to 2005 - and global CDO heads Kenneth Margolis and Harin DeSilva said they expect more of the same this year. "Based on our current 2007 pipeline and expectations for expansion, particularly in synthetics, CLOs, CRE CDOs, trust preferred CDOs and other new products, we expect to continue to significantly add personnel globally across all regions," Margolis said.

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