MIAMI - Shaken by diminished investor demand and in some cases significant losses, but heartened by improving market conditions, CDO issuers are cautiously slipping quarters back into the so-called CDO machine that once fueled much of the subprime mortgage sector's most recent rise.

Participants in last week's Information Management Network Spring ABS 2007 conference said they anticipate ABS CDO issuance will begin picking up steam by the end of the summer, thanks to cleaner HEL collateral, structural tweaks and renewed investor demand.

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