Last week, Wachovia Securities let the CDO market glimpse its APEX structure and issuance platform. Apparently, APEX is testament that the CDO market is evolving such that the interests of CDO equity investors are more aligned with debt tranche holders. While this measure is not seen as a cure-all for the sector, it is a step in the right direction to right this wayward market.

In a recent structured products research piece titled "Enhancement Through Structural Change," Wachovia research analysts Nichol Bakalar and Jeff Prince explain that three derivatives - balance, credit and income swaps - are blended together and essentially act as a single instrument, dubbed the "APEX Swap," to further balance the interests of parties involved in a CDO.

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