CBO

1. An acronym for a "collateralized bond obligation.
2. A collateralized bond obligation is an asset-backed security issued by an SPV. The underlying assets owned by the SPV and serving as collateral for the securities are a pool of high yielding corporate bonds and/or sovereign debt. Typically, the SPV purchases it assets in the secondary market through its collateral manager. Ratings assigned to CBO securities are based on rating agency guidelines which subject the portfolio of assets to various credit tests including maintenance of a minimum weighted average rating for the pool of underlying assets and diversification among the obligors on the assets. Often CBO's are issued in tranches with various credit ratings, with junior classes of securities providing credit support for senior classes of securities..

Copyright (c) 2002-2019 William H. Widen. All rights reserved.  ^ Page Top ^