CDOs Flicker to Life With Babson, Deutsche Takeovers

While CDO firms are starting to revive sales of securities backed by leveraged loans, the market for deals comprising mortgage and other asset-backed debt has been closed since 2007. Sales of the securities totaled more than $144 billion last year, according to JPMorgan Chase & Co. data.

``We don't see any revival for CDOs backed by asset-backed debt,'' said Natcharian. ``We do expect to see CLOs come back, although investors will be much more discriminating.''