CDO

CDO
collateralized debt obligation (CDO)
(1) A multi-tranche security with credit risk exposure to corporations. A securitization of corporate obligations. CDOs can be securitizations or re-securitizations of commercial loans, corporate bonds, other types of ABSs, residential MBSs, commercial MBSs, and emerging market debt. CDOs may even be backed by other CDOs. Securitizations of corporate bonds are a type of CDO called a collateralized bond obligation or CBO. A synthetic CDO uses credit default swaps rather than actual corporate obligations to create a pool of credit exposure. Similar to the more familiar CMO, except that in a CDO the tiers or tranches are created with differing levels of credit quality. A CBO divides the credit risk of a pool of high yield bonds into different classes that appeal to investors with different credit risk tolerances. The CDO structure creates at least one tier of investment-grade bonds. The contractual rules for the cash flow distributions in a CDO structure enable the senior tranches to receive high credit ratings by shifting risk to the equity tranche.
(2) The term "CDO" may be used to refer to the special purpose entity, SPV, that holds the securitized assets. American Banker Glossary
————
See: collateralized debt obligation. Bloomberg Financial Dictionary

* * *

   Collateralized Debt Obligation. An asset-back security which uses a portfolio of bonds or loans as collateral, or security. A sponsor uses the portfolio to set up a special purpose investment vehicle which issues securities or CDOs, sometimes with a higher credit rating than any of the individual underlying assets. There may be reduced transparency in assessing the underlying risks.
   ► See also ABS (Asset-backed Securities).

Financial and business terms. 2012.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • CDO — collateralised debt obligations (CDO) International Structured finance instruments (being debt securities (debt security) in the form of bonds or notes) which are divided into several classes or tranches of varying size, credit rating and… …   Law dictionary

  • CDO — may refer to: * Collateralized debt obligation, a structured finance product * Central dense overcast, in a tropical storm * Cysteine dioxygenase, an enzyme * Connected Data Objects, a free implementation of a Distributed Shared Model on top of… …   Wikipedia

  • Cdo — Cette page d’homonymie répertorie les différents sujets et articles partageant un même nom. {{{image}}}   Sigles d une seule lettre   Sigles de deux lettres > Sigles de trois lettres …   Wikipédia en Français

  • CdO — may refer to: *Cagayan de Oro City *Cadmium oxide …   Wikipedia

  • CDO — Сокращение CDO или CdO может означать: Оксид кадмия (химическое обозначение  CdO)  химическое вещество, основное сырьё для производства других соединений кадмия. Облигации, обеспеченные долговыми обязательствами (англ.)русск. (англ …   Википедия

  • CDO — Die Abkürzung CDO steht für: den Verantwortlichen für die Entwicklungsabteilung eines Softwareunternehmens, siehe Chief Development Officer den Verantwortlichen für die Datenverarbeitung und gewinnung innerhalb eines Unternehmens, siehe Chief… …   Deutsch Wikipedia

  • Cdo — Die Abkürzung CDO steht für: den Verantwortlichen für die Entwicklungsabteilung eines Softwareunternehmens, siehe Chief Development Officer Collateralized Debt Obligation, ein forderungsbesichertes Wertpapier eine Stadt auf den Philippinen, siehe …   Deutsch Wikipedia

  • CDO — Cette page d’homonymie répertorie les différents sujets et articles partageant un même nom.   Sigles d’une seule lettre   Sigles de deux lettres > Sigles de trois lettres   Sigles de quatre lettres …   Wikipédia en Français

  • CDO-squared — noun A type of CDO (collateralized debt obligation) that invests in other CDOs …   Wiktionary

  • CDO — command duty officer …   Military dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”