Issuance of collateralised debt obligations (CDOs) has increased dramatically, according to a report by JP Morgan cited in the Financial Times on Friday.
The newspaper report says that the total issuance of CDOs – which are re-packaged portfolios of debt securities or debt derivatives – reached $503 billion, up 64 per cent on 2005. Issuance in 2006 was six times higher than in 2004, according to the Bank for International Settlements.