While growth in the asset-backed CDO market in 2005 soared - with some underwriters posting triple-digit gains in sales (see cover story) - the downside was often the difficulty faced in finding collateral fast enough and of high enough quality to make deals happen. Collateral spreads through most of the year remained at historically tight levels, creating an at-times challenging terrain for achieving arbitrage and even prompting some managers to pull out of the market altogether.

Regardless of the varying opinions on which bonds were best at which enhancement levels, this year's ABS CDO Deal of the Year was chosen because of its precedent-setting innovation, which led to faster and more diverse collateral sourcing in a highly competitive, and at times controversial, atmosphere.

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