May 20, 2008

Collateralized debt obligations, the securities that contributed to USD323 billion of bank writedowns, 65,000 job losses and the collapse of Bear Stearns Cos, may be staggering back to life. Babson Capital Management LLC took over a USD680 million CDO from Hartford Financial Services Group Inc this month, adding to the USD22 billion of the securities it oversees. Deutsche Asset Management replaced London-based Brevan Howard Asset Management LLP on a CDO in April. Blackstone Group LP, the largest buyout fund operator, sold three CDOs totaling USD1.3 billion in April.