Investors looking to exploit the newly volatile home equity ABS sector are expected to be among the catalysts for the growth in a relatively new CDO structure, combining both funded and unfunded assets and liabilities, to hit the U.S. market.

Although a standard definition for the structure does not yet exist, industry participants estimate that some half dozen of these so-called cash and synthetic hybrid CDOs have come to the market so far this year. Rating agencies, for one, are anticipating market fundamentals to encourage more of these deals next year, with Fitch Ratings and Standard & Poor's both confirming that at least two such transactions are currently in the pipeline, for which Fitch is estimating arrival dates of December and January.

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