While investors complain about depreciating CDO market value, others, with robust credit skills welcome the bargain hunting opportunities in the secondary market. Nothing pleases the vultures more than an ABCP conduit with wounded CDOs. "CDO secondary spreads have only one direction to move, and that's wider," said one industry insider.

The theory is that if the CDO ratings downgrade momentum continues, as it likely will, several ABCP vehicles could be forced to liquidate their first priority, triple-A positions. That would cause senior CDO spreads to widen and subsequently make the less attractive mezzanine bonds cheaper. The rating agencies do not allow CP conduits to hold sub double-A securities. And it is not uncommon for senior paper of arbitrage cashflow CDOs, slightly breaching ratings test, to see bids below 93.00.

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