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CDO

A CDO is a collateralized debt obligation or collateralised debt obligation known collectively as CDOs. CDOs are a type of asset-backed security or structured credit product that offers exposure to the credit of a portfolio of fixed income assets, such as corporate or government debt, loans, asset-backed securities (ABS), including mortgage-backed securities (MBS) such as CMBS and MBS, known as CDOs of ABS or ABS CDOs, or other CDOs, known as CDO-squared or CDOs of CDOs. CDOs can be cashflow CDOs (referencing real assets) or synthetic CDOs (referencing credit derivatives, such as CDS) or hybrid CDOs (a mix of cashflow and synthetic). Typical CDOs divide the credit risk among different tranches: senior tranches (rated AAA), mezzanine tranches (AA to B) and equity tranches (unrated). Losses are applied in reverse order of seniority and so junior tranches offer higher coupons to compensate for the added risk. However, synthetic CDOs can be structured to offer single-tranche CDOs as well.


  • Credit challenges

    CLOs show resilience in stress scenarios

    Central bank and government countermeasures are likely only able to offer short-term liquidity suppo...

    News    2 April 2020
  • Pressure drop

    European CLO market update

    Margin call pressures on European CLO warehouses appear to be subsiding. However, pricing levels rem...

    Market Reports    31 March 2020
  • Euro CLO coronavirus exposure mitigated

    Sector developments and company hires

    Euro CLO coronavirus exposure mitigated A portion (15%) of European CLO collateral is derived from...

    Market moves    27 March 2020
  • Research head named

    Sector developments and company hires

    North America David Walker has joined CIFC as head of research, responsible for leading the firm&...

    Market moves    24 March 2020
  • AXA IM creates two key units

    Sector developments and company hires

    AXA IM restructuring AXA Investment Managers intends to create a new €137bn business unit...

    Market moves    11 March 2020
  • Dutch VAT grace period mulled

    Sector developments and company hires

    Alhambra missed payment A borrower of a €10m loan securitised in the Alhambra SME Funding...

    Market moves    10 March 2020
  • Virus-related volatility

    European ABS market update

    The European securitisation market appears to be being affected by coronavirus-related volatility. S...

    Market Reports    6 March 2020
  • Bulgarian micro loan guarantees inked

    Sector developments and company hires

    Bulgarian guarantees The EIF has signed new guarantee agreements with Unicredit Bulbank, United Bul...

    Market moves    4 March 2020
  • IRPH index ruling 'credit negative'

    Sector developments and company hires

    CMBS property sales KBRA has been notified of the sale of 29 properties in the Eos (ELoC No. 35) CM...

    Market moves    3 March 2020
  • DLT litigation ABS on the cards

    Sector developments and company hires

    Acquisition Pretium Partners has acquired the investment management business of Latigo Partners....

    Market moves    2 March 2020
  • MSR subservicing transfer agreed

    Sector developments and company hires

    EMEA Michael Fiebig has been appointed coo at responsAbility Investments. Fiebig will be responsi...

    Market moves    27 February 2020
  • Strong liquidity

    European CLO market update

    Liquidity continues to be strong in the European primary CLO market, with three deals pricing last w...

    Market Reports    25 February 2020
  • Social factors

    Positive ESG scores for post-crisis vintages

    ESG relevance scores (ESG.RS) are more likely to be negative for seasoned securitisations, according...

    News    24 February 2020
  • VAT switch

    European CLO managers hit with backdated bill

    Dutch tax authorities have changed their interpretation of VAT law in connection with CLO management...

    News    24 February 2020
  • Minority equity interest acquired

    Sector developments and company hires

    Equity interest acquired Affiliated Managers Group has acquired a minority equity interest in Com...

    Market moves    20 February 2020
  • Auction house

    Online AMR, BWIC matching services debut

    January was a breakthrough month for KopenTech for two reasons. Not only did the firm execute its fi...

    News Analysis    19 February 2020
  • Ares co-founder steps down from board

    Sector developments and company hires

    North America Ares Management Corporation has appointed Kipp deVeer to its board. Concurrently, J...

    Market moves    17 February 2020
  • Equity issue

    Loan repricing expectations weigh heavy on CLOs

    The widely expected wave of loan repricing is weighing heavily on the CLO market. Equity investors a...

    News Analysis    11 February 2020
  • CMBS trustee assumption refuted

    Sector developments and company hires

    EMEA Michael Newell has joined Cadwalader, Wickersham & Taft as a partner in London. A me...

    Market moves    10 February 2020
  • GSE Libor transition deadlines released

    Sector developments and company hires

    ECOWAS prepping ABS The Commission of the of the Economic Community of West African States (ECOWAS)...

    Market moves    6 February 2020
  • Rating agency shuffles senior US staff

    Sector developments and company hires

    EMEA Pan-European special situations and credit trading lawyer Justin Conway has joined McCarthy De...

    Market moves    5 February 2020