On February 22, 2012, The Financial Times reported that US sales of new collateralized loan obligations (CLOs) are set to make February 2012 the strongest month for CLOs since the financial crisis. CLO managers have announced or issued approximately $2.51 billion of new issuance in February (see Financial Times, Sales of CLOs at Strongest Pace Since Crisis). Analysts have been optimistic about CLO activity this year because the corporate loans that are used to collateralize CLOs did not experience the same degree of losses as other securitized products, such as home loans, during the financial crisis.

Despite this strong pace, however, CLO issuance might have been even stronger in 2012 but for a lower volume of lending so far this year. There are also concerns over how CLOs may be impacted by:

For more information on developments in securitization, including CLOs, see Practice Note, Current Developments in Securitization: Overview.