CDOs

ING Alternative Asset Management, a unit of ING Investment Management, has been appointed as the successor collateral manager for three CLOs previously managed by Avenue Capital Management II.

Highland Capital Management, an investment management firm based in Dallas, Texas, completed its CLO Value Fund I and that the fund has provided 138% gross

Jefferies has hired Sharif Anbar-Colas as its global head of CLO and CDO trading, an addition that is part of the firm's expansion of its fixed income business, the New York-based investment bank said today.

It's fitting that the ASF conference is being held in Washington, D.C. Uncle Sam, after all, has been playing a crucial role as securitization's savior as well as working double time to alleviate the problems plaguing the mortgage market.

"There are snakes that go months without eating. And then they finally catch something, but they're so hungry that they suffocate while they're eating. One opportunity at a time." - Don Draper, Mad Men

A Milwaukee County Circuit Court judge ruled yesterday that a lawsuit filed by five southeastern Wisconsin school districts against several financial firms over the safety of an investment involving synthetic CDOs can proceed.

Nixon Peabody expanded its securitization and structured finance group as well as its corporate trust team.

Investment management firm Babson Capital Management has been selected by the controlling class of investors to serve as successor collateral manager of two CDOs previously managed by Tricadia Loan Management.

Prior to the recent dark age of credit, CLOs were kings in the land of the leveraged loan, a seat of power that diminished as the recession wore on and the loans in their fiefdoms lost value, causing a medieval-like bleeding of cash. But now sources say CLO cash is back, and the funds may once again be influencing the primary loan market.

The ongoing The TCW Group and Jeffrey Gundlach soap opera completed another episode yesterday when the money management firm filed suit against the bond pro and his new institution in Los Angeles Superior Court.

Commercial finance firm NewStar Financial completed a $275 million CLO. The proceeds will be used to refinance existing debt and provide $50 million of new lending capacity.

As is often the case when looking into the future, we have some good news and some bad news regarding the leveraged loan market in 2010. The bad news, though hardly a surprise, comes in the form of returns - much lower ones. The good news is the expectation that primary issuance will jump, with some market participants portending the return of the CLO.

As of the holidays, a hefty CDO was in the Brazilian market and drawing substantial interest, sources said.

In 2009, the ABS market came back from the brink. Because of extensive government support in the U.S. and across the pond, issuers and investors emerged from hiding and started doing deals again. But this nascent activity was all premised on the fact that the government was serving as the securitization market's backstop.

Since mid-2007, the European securitization primary markets have been living in a state of suspended animation.

It appears that the three largest U.S. banks have begun to prepare for the much-awaited (and doubted) comeback of the CLO market.

Fitch Ratings published its surveillance criteria for rating CDOs exposed to corporate debt.

Highland Capital Management is working on an array of loan-focused funds that it hopes to launch at the beginning of 2010.

Overview

The financial crisis has brought a renewed consciousness to ABS investors - they need to get to the nitty-gritty of what they own. Nora Colomer's article this month focuses on this very issue.