CDOs

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.

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

Standard & Poor's downgraded $43.74 billion European CDOs after updating ratings criteria in September.

Deloitte & Touche is about to further boost its securitization and leveraged loan efforts by hiring for its software development team.

Syncora Holdings appointed Susan Comparato as chief executive officer and president.

Investment bank Aladdin Capital Holdings has purchased the synthetic CDO business of European specialist credit management company Solent Capital Partners.

Standard & Poor's European CLO performance index report for September shows that all of the CLO cohorts except 2006 experienced an increase in the percentage of assets rated in the 'CCC' category — 'CCC+', 'CCC', or 'CCC-'.

Just a week after industry players gathered at Information Management Network's ABS East event — where securitization players still seemed down on the prospects of a CDO market staging a return — Citigroup is reportedly marketing a rated CDO.

There are those who predict that the next sky to fall with be the one above CMBS. The question for our markets is: Will it also land on leveraged finance?

Fitch Ratings has placed 58 classes from 13 commercial real estate CDOs containing a concentration of 2005 vintage CMBS urities on Rating Watch Negative.

Moody's Investors Service said today that it the ratings currently assigned to notes issued by Cherry Creek CDO II, will not, at this time, be reduced or withdrawn just because of the appointment of Princeton Advisory Group as the replacement collateral manager.