So much for the death of securitization. When CDOs, CLOs, CMOs, SIVs and ABCP conduits started blowing up left and right last summer as investors disappeared because of concern about credit quality, various pundits predicted it would be a long time before any banker had the guts to try again.
That long time turns out to be about nine months. Lehman Bros. Holdings Inc. is launching a collateralized loan obligation (CLO) that will buy a basket of takeover loans that have been mouldering on Lehman's balance sheet. The CLO, called Thalia European, will then offer bonds with various levels of risk (tranches) to investors. Deutsche Bank AG and Credit Suisse Group have also revived the CLO structure to clear debt off their balance sheets.
For the record, Thalia was one of the daughters of Zeus, and she was the muse of comedy. But Lehman doesn't appear to be joking.
