In its new bi-weekly market wrap called CDOpinions, Fitch Ratings notes that some CDO issuers are exploring funding in the MTN market. While it's been limited so far, the use of MTNs has become another option for issuers.

"Anything that enhances the arbitrage is something that people would want to explore," said Hedi Katz, managing director and author of Fitch's newsletter.

Similar to the trend of ABCP/money-market tranches, structurers aim to take advantage of cheaper funds at the front of the curve.

These notes could be structured with puts - again similar to the CP issues - to guarantee "a maximum spread" in the event that the deals could not be re-marketed, Fitch said.

The recent Duke Funding VI, an Ellington Capital Management deal led by UBS, featured an MTN tranche.

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