Collateralized Loan Obligations ("CLOs") - The Other Shoe Dropping?

"The music has now stopped, however. CLO issuances have dropped from $127 billion in the first half of this year to $20 billion in the second half. As with CDOs, buyers of CLOs are highly concerned about the quality of the securities that they have purchased. A recent survey of fund managers and institutional investors reflects a high degree of skepticism - barely half indicated that they were comfortable with even AAA rated CLOs. Moreover, only 24% indicated a willingness to buy debt of companies that were leveraged greater than 5 times earnings."