The pace of new collateralized debt obligation sales is moving at roughly twice the speed of last year's market, with about $46 billion up to the midpoint of the year versus roughly $22 billion in the same span last year. The activity puts the market on a pace for a $90 billion year, compared to last year's $74 billion.
And despite the furious pace of new issue origination, credit quality of seasoned deals remains strong. Deutsche Bank research shows about $10 billion more in principal has been upgraded than downgraded (roughly $20 billion versus $10 billion). This downgrade-to-upgrade ratio is healthier than that of the broader structured finance market--which is surprising since CDOs have had a rockier past than other sectors--at about 4:5.