As the Alt-A mortgage market falters, Wall Street firms are reviving an old concept to repackage triple-A bonds that may soon fall from grace. This is an effort to avert sell-offs by investors or potentially spruce up their own holdings as they search for buyers.

On June 6, Barclays Capital published a report titled "Phoenix Rising: Re-enhanced Alt-A Seniors Reduce Risk Without Jeopardizing Value" that describes splitting an Alt-A-backed bond into a "re-enhanced" larger portion and a riskier smaller piece. The deal represents a bond Barclays is looking to restructure, and it's gauging interest in such a transaction. Other major MBS dealers have been testing the waters and their efforts appear to be picking up.

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