Participants in the market of collateralized debt obligations said major players are working on CDO deals meant to capitalize on low interest rates and declining corporate defaults. "We hear several deals being talked about, and we have been shown a couple of them for our participation," said Chandrajit Chakraborty, managing partner at Pearl Diver, a structured-credit fund. Bank of America Merrill Lynch, Morgan Stanley and Goldman Sachs are said to be developing CDO offerings.

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