NEW YORK - The CDO market is embroiled in an ongoing battle for collateral, and to the consternation of investors, the food fight has forced some managers to seek out alternative solutions, according to delegates at Information Management Network's CDO and Credit Derivatives conference held here last week.

Indeed, "collateral scarcity" was the bugbear of the day. "There are still leverage loans and other CDO collateral being created, but the spreads are tightening to the point where the arbitrage is becoming less compelling," said James Finkel of Dynamic Credit Partners.

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