Following on the heels of the booming synthetic subprime mortgage market, CMBS are picking up steam within the synthetic sector. The collateral type is no longer just an afterthought in synthetic CDOs of asset-backed securities, as CMBS now constitutes larger portions, and at times the entirety, of synthetic CDO collateral in some deals, according to Richard Hrvatin, a senior analyst at Fitch Ratings.

"I think a lot of it has to do more with just a general acceptance of the synthetic technology," Hrvatin said. In other words, CMBS issuers are catching up to ABS issuers as previous barriers to liquidity in the synthetic marketplace for these securities are coming down. For example, the International Swaps and Derivatives Association's release of standardized synthetic ABS trading forms in June. The pay-as-you-go format was designed in particular for RMBS and CMBS trades.

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