Coming off a less than stellar year for CDOs, market watchers are anxious to cast nets in waters teeming with life. Their best fish-finder, it seems, may be the increased use of "customization."

As has always been the case, collateralized debt obligations are instruments that offer a level of customization by their very nature, as the collateral manager chooses (according to guidelines) the assets backing the bonds. This fact, according to banks at least, has been the fundamental draw for investors - CDOs are structures that create custom exposures that investors desire but cannot find elsewhere, as JP Morgan Securities researchers like to put it.

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