In spite of continued interest in bringing to market synthetic collateralized debt obligations referencing municipal bonds, the challenge of transferring the underlying tax benefits to structured deals continues to hold up issuance. Vandana Sharma, director at Standard & Poor's in New York, said interest in muni structures has evolved from preliminary discussions to now evaluating specific pools of assets and undertaking tranching exercises with specific structurers. In spite of this the asset continues to be in a developmental stage due to the problem posed in preserving the tax-exempt status of the cash flow from such securitizations, she said.