Despite CREMAC's recent sale of $180 million in high-yield bonds previously earmarked as collateral for the firm's first CDO offering, it intends to issue its three CDOs this year using different collateral, said Joseph Cafiero, president of the New York-based asset management firm.

CREMAC is turning up its nose to high-yield bonds right now, and despite accruing some $60 million in new-issue home equity ABS in recent months, is not thrilled about much of that sector's prospects right now either, Cafiero said. CREMAC plans to launch its arbitrage cash flow CDOs this year in the commercial mortgage-backed security, mezzanine, and high-grade sectors, he said.

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