Last year began promisingly for the collateralised loan obligation (CLO) market, with rapidly growing volumes, landmark deals and innovative structures opening new doors for risk distribution. The market’s bright outlook, however, has been overshadowed by recent events. The fallout from September 11, the Enron bankruptcy and an increasing number of defaulted names in CLO portfolios has led to widening credit spreads, a collapse in issuer volume and greatly reduced liquidity. These pitfalls c
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