The benefit of the asset pool.

Let's look at the structured credit market for example, which is one form of structured product. The corporate loan Market at 1.2 trillion is the loan pool source.

For the collateralized loan obligation or CLO to be more specific. We are looking at broadly syndicated leverage loans which are loans of a certain value generally greater than 350 million that are issued by publicly rated companies and underwritten by a lead bank and then sold off to other banks or other institutional investors.

We can see that there is a great variety in the industries where the corporate loans are ultimately made the majority of corporate loans are some investment rate, which means the yield on the debt is very appealing but it also makes them riskier as a single credit. However, if we build an SPV with 100 or 200 loans as the pool's often contain, we would diversify risk away from exposure to one single credit and benefit from the cash flows of a broader pool.

We would also gain diversity in terms of both industry and credit quality including the size of the loans made to each borrower. There are two other very important qualities in the leverage loan market seniority and security.

The majority of loans to the sub-investment grade market are senior in terms of the payment terms and they're secured by either a first or second lien on the assets.

Senior first lien loans make up the bulk of loans purchased by CLO issuers about one half of these loans or 600 million will end up in the CLO market.