This week we speak with David Preston, managing director in the Structured Products Research group at Wells Fargo Securities. David covers CLOs, CDOs and Commercial ABS, and publishes a widely-respected report, The CLO Salmagundi.

The Lead Left: David, CLOs were left for dead last year with all the regulatory pressures they seemed to be facing, but we’re seeing $1 billion vehicles and near-record volume. What’s going on?

David Preston: CLOs are very efficient vehicles for asset managers to raise AUM. Risk retention rules aren’t scheduled to take effect for two years, so if you think that’ll inhibit your ability to issue CLOs, you’ll rush to get them in before the deadline. Managers will try to launch as many as possible.