collateralized debt obligations
- collateralized debt obligations
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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 priority ranking, issued by a special purpose vehicle (SPV) and backed, that is funded by and secured over, a diverse portfolio of financial assets (typically consisting of commercial loans, corporate bonds and/or structured finance securities (including asset-backed securities, mortgage-backed securities and CDO securities issued by other SPVs)) acquired by the SPV. The SPV will purchase the assets in the open market or directly from the balance sheet of the collateral manager or arranging bank. It will fund this purchase with the proceeds arising from the issue of its CDO securities.
A CDO transaction is essentially a form of securitisation of certain financial assets.
USA
A type of debt security backed by a group (or pool) of fixed income assets (ranging from mortgage-backed securities to corporate bonds sold in the market). To maximize the range of investors to whom they can be sold, the securities are divided into different classes. These typically consist of senior and subordinated tranches (often including an equity tranche at the most junior level) that have differing priorities (priority) regarding payment of principal and interest, differing maturities and differing interest rates. The tranches are generally rated by a credit rating agency. The more senior tranches have the right to priority of payment over more junior tranches, but the more junior tranches carry a higher rate of interest, as they are riskier assets.
Glossary
Practical Law Dictionary. Glossary of UK, US and international legal terms.
www.practicallaw.com.
2010.
Look at other dictionaries:
collateralized debt obligations — UK US noun [plural] (ABBREVIATION CDOs) ► FINANCE combinations of bonds and other assets with different levels of risk that are put together to create new investments: »The company manages collateralized debt obligations, pools of assets like… … Financial and business terms
collateralized loan obligations — collateralised loan obligations (CLO) International Also referred to as CLO. Structured finance instruments (being debt securities (debt security) in the form of bonds or notes) which are backed, that is funded by and secured over, a portfolio of … Law dictionary
Collateralized debt obligation — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond … Wikipedia
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… … Financial and business terms
collateralized debt obligation — 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
Collateralized Debt Obligation — Collateralised debt obligation Un CDO (pour collateralized debt obligation, en français, « obligation adossée à des actifs ») est une structure de titrisation d actifs financiers de nature diverse. Sommaire 1 Son fonctionnement 2 Les… … Wikipédia en Français
Collateralized debt obligation — Ein forderungsbesichertes Wertpapier (englisch: „asset backed security“, kurz „ABS“) ist ein verzinsliches Wertpapier, welches Zahlungsansprüche gegen eine Zweckgesellschaft (englisch: „Special Purpose Vehicle“, kurz „SPV“) zum Gegenstand hat und … Deutsch Wikipedia
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 priority ranking, issued by a special… … Law dictionary
Collateralized loan obligation — Collateralized loan obligations (CLOs) are a form of securitization where payments from multiple middle sized and large business loans are pooled together and passed on to different classes of owners in various tranches. A CLO is a type of… … Wikipedia
Collateralized fund obligation — A collateralized fund obligation (CFO) is a form of securitization involving private equity fund or hedge fund assets, similar to collateralized debt obligations. CFOs are a structured form of financing for diversified private equity portfolios,… … Wikipedia
