CDO Dealers Stricter on Mark-to-Market.(collateralized debt obligation)(Brief Article)

Investors in the collateralized debt obligation (CDO) market are complaining that dealers are marking-to-market CDOs at unprecedentedly wide levels on sale versus purchase prices.

While this is nothing new - it has been going on for several years now, and is always more pronounced in the fourth quarter - sources say the Street has become even more stringent in terms of financial reporting in the wake of the Sept. 11 attacks, and this is coming to play on the marks, or bids, made on clients' portfolios.

Dealers have been marking confirmed triple-A arbitrage cash CDOs, issued by upper-tier collateral managers and sold in the low 40s, at about 60 basis points over Libor. This 18 to 20 basis point gap between a purchase level and a sale could result in …