Structured Credit Bubble 2.0: Asian Investors Binge On “Boom-And-Bust” CLOs; Issuance Up 97% YoY

Back in 2006, some of the wall street banks (ahem, Goldman) managed to layoff quite a bit of their mortgage risk to unwitting European and Asian investors who, in their desperate ‘search for yield’, had no idea they had just been conned into stepping in front of a freight train. Now, it seems that the same thing may be happening yet again with another favorite wall street structured product, Collateralized Loan Obligations (CLOs).
According to Bloomberg, money managers in Korea, Japan and China are piling into CLOs, and often into the most junior tranches no less, at an alarming rate which has resulted in a staggering 97% increase in YoY new issuance volume.

This post was published at Zero Hedge on May 19, 2017.