Despite intense hurdles for second-tier collateral managers new CDO transactions continue to come to market. According to IFR Asset-Backed Securities database there are currently 11 visible U.S.-dollar CDOs marketing debt tranches, and 15 deals still marketing equity, at this point. Saying equity is hard to sell has become as obvious a statement as saying the sky is blue.

"Many of my counterparts are waiting on the sidelines to see where the bottom of the financial markets is and what will be the reaction to further U.S. attacks," said a CDO equity investor. "Although equity investors are largely sidelined, the returns are great." Write downs of CDO losses such as American International Group's recent $125 million hit has taken-out several participants that bought at the bottom of the capital structure. Further, one of Europe's largest CDO investors, with over $600 million in CDO equity exposure, has put a freeze on buying high-yield equity largely because the firm doesn't see a realistic premium in high-yield bonds currently being purchased by collateral managers. However the firm is still buying ABS and bank-loan CDO equity.

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