It appears CDO investors have moved in larger numbers toward a newer method for analyzing collateral - at least for high yield and leverage loan CDOs.

While investment banks have been doing it a bit differently for some time now, investors have still clung to ratings-based CDR (constant default rate) cash flow methodology. However, comments at a recent CDO-focused conference in New York revealed that a transition toward pricing using individual asset prices and individual default rate is occurring.

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