Collateralized Debt Obligation - CDO

Definition of 'Collateralized Debt Obligation - CDO'

A structured financial product that pools together cash flow-generating assets and repackages this asset pool into discrete tranches that can be sold to investors. A collateralized debt obligation (CDO) is so-called because the pooled assets – such as mortgages, bonds and loans – are essentially debt obligations that serve as collateral for the CDO. The tranches in a CDO vary substantially in their risk profile. The senior tranches are relatively safer because they have first priority on the collateral in the event of default. As a result, the senior tranches of a CDO generally have a higher credit rating and offer lower coupon rates than the junior tranches, which offer higher coupon rates to compensate for their higher default risk.

http://www.investopedia.com/terms/c/cdo.asp

擔保債務憑證(Collateralized Debt Obligation，簡稱CDO)，資產證券化家族中重要的組成部分。它的標的資產一般是信貸資產或債券。這也就衍生出了它按資產分類的重要的兩個分支：CLO(Collateralised Loan Obligation)和CBO(Collateralised Bond Obligation)。前者指的是信貸資產的證券化，後者指的是市場流通債券的再證券化。可是它們都統稱爲CDO。

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