Are investors ready to take on corporate risk again? Judging by the recent attention that high yield-backed CDOs have received in the European market lately, it appears as though the capital markets are beginning to stabilize. However, the market is probably not ready to turn the corner yet, sources say.

Still, the changing tides are noticeable, even if they are only significant in relative terms. Two months ago, investors were largely expected to steer clear of corporate-related paper, but in the past weeks people were slowly trickling back into the secondary market.

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