Among other impacts of the deteriorating credit quality in the high yield market - which has subsequently triggered downgrades - the concentrations of triple-C rated assets in collateralized debt obligations have been rising above the imposed structural limits, prompting managers to sell off assets before they're downgraded, according to a report by Standard & Poor's Ratings Service.

Interestingly, with the CDO market at roughly $250 billion - and a substantial concentration of that in high yield assets - so called "haircutting" could be creating an offshoot relative value opportunity, where B-rated assets are being sold at artificial discounts, sources said.

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