Ever since the credit drought set in, loan market participants have been wondering when a new CLO would fall from the sky. There have been a number of predictions regarding CLO activity over the past year or so, but only a few have actually materialized. However, now that conditions have improved, some market participants think a CLO storm cloud is just over the horizon, and they expect to see new CLOs in another six months or so.
"I have heard that some underwriters are approaching the largest CLO managers about potential deals in 2010," a West Coast-based investor said. "It is not clear though if these are bankers trying to create something and then find buyers, or if they have demand from liability buyers."