NEW YORK - The controversial topic of "notching" ratings and investor bias in buying bonds rated by a particular agency has been debated among market participants in hushed tones for a long time, but last week, at the Commercial Mortgage Securities Association's Seventh Annual CMBS convention - at a session appropriately titled "CDOs: The Truth," - the thorny subject was finally tackled head-on.

Every rating agency puts restrictions on collateral not rated by itself, and often it will gauge its own rating by "notching" or adjusting the other agency's rating to estimate its own mark.

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