Three principals of CDO collateral manager Triton Partners, said to be "key" to the firm's CDO of CDOs team, walked out on Triton last week.
The defection included Arturo Cifuentes and John Polansky, both former seniors at Moody's Investors Service, and Daniel Arbess.
Now heading up the CDO of CDOs team is Jim Wang, a managing director and quantitative analyst. It was confirmed that Triton is in the process of hiring replacements.
In an e-mail circulated to former clients and contacts, Cifuentes gave no reason for his departure.
"What I suspect is that they will try to take the deals with them," said one CDO market analyst.
Triton has four high yield CDOs that have seen several downgrades since losing senior professionals in the late 1990s.
Analysts say it is probable that investors will exercise "key man" covenants if a satisfactory replacement team is not found in short time, particularly given Triton's track record in the high yield business.