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.

  • SCI Start the Week - 13 July

    A review of securitisation activity over the past seven days

    Last week's stories Arch restarts MILNs Relaunched Bellemeade Re 2020-1 priced Collection boo...

    News    13 July 2020
  • Volcker revision impact modest

    Sector developments and company hires

    Volcker revision impact modest The impact of the changes made to the Volcker Rule (SCI 26 June) wil...

    Market moves    6 July 2020
  • Subprime auto performance eyed

    Sector developments and company hires

    Subprime auto performance eyed Davis & Gilbert’s latest Credit Chronometer subp...

    Market moves    25 June 2020
  • RFC issued on NPL ABS treatment

    Sector developments and company hires

    RFC on NPL ABS treatment The Basel Committee has published a technical amendment in connection with...

    Market moves    24 June 2020
  • QM price-based approach mooted

    Sector developments and company hires

    QM price-based approach mooted The CFPB has issued two notices of proposed rulemaking (NPRMs) to ad...

    Market moves    23 June 2020
  • MILN market set to reopen

    Sector developments and company hires

    MILN market set to reopen Arch has returned to the market with Bellemeade Re 2020-1, after it was...

    Market moves    22 June 2020
  • Californian auto loans eyed

    Sector developments and company hires

    Californian auto loans eyed The Westlake Automobile Receivables Trust 2020-2 issuer has disclosed t...

    Market moves    12 June 2020
  • Resolve and resilience

    Content sponsored by Ocorian

    James Maitland, regional head of Americas, Bermuda & Caribbean, and global head of capita...

    Talking Point    10 June 2020
  • Spread compression

    European ABS market update

    The rally in broader risk assets and the lack of new supply has boosted demand for paper in the Euro...

    News    9 June 2020
  • CLO business integrated

    Sector developments and company hires

    CLO business integrated RBC’s US-based CLO management business is being integrated into B...

    Market moves    8 June 2020
  • More Euro CLOs on review

    Sector developments and company hires

    More Euro CLOs on review Moody’s has put a further 234 tranches from 77 European BSL CL...

    Market moves    3 June 2020
  • New paradigm?

    Trustee discretion required in virtual environment

    The coronavirus crisis ushered in a new paradigm for securitisation noteholder communication and doc...

    News Analysis    2 June 2020
  • Corporate actions slow down

    Sector developments and company hires

    Corporate actions slow down Negative rating actions on corporate loan issuers continue to accumulat...

    Market moves    14 May 2020
  • Known unknown

    Lack of data in MM CLOs leaves future open to interpretation

    US middle market CLOs currently appear to be in a better position than their broadly syndicated loan...

    News Analysis    7 May 2020
  • Ladder locks in financing

    Sector developments and company hires

    Ladder locks in financing Ladder Capital has entered into a strategic financing arrangement with ...

    Market moves    5 May 2020
  • WAM guidelines finalised

    Sector developments and company hires

    WAM guidelines finalised The EBA has published its final guidelines on the determination of the wei...

    Market moves    4 May 2020
  • MBS overvaluation case settled

    Sector developments and company hires

    Overvaluation case settled The US SEC has accepted an offer of settlement from Semper Capital Manag...

    Market moves    1 May 2020
  • Targeted action

    Wholesale ratings downgrades questioned

    The raft of negative rating actions currently hitting the securitisation market is perceived to be d...

    News Analysis    1 May 2020
  • Unlocking capital

    Premod Thomas, ceo of Bayfront Infrastructure Management, answers SCI's questions

    Q: Bayfront Infrastructure Management is seeking to help address an infrastructure financing gap in...

    The Structured Credit Interview    30 April 2020
  • Prudential flexibility reiterated

    Sector developments and company hires

    Prudential flexibility reiterated The European Commission has adopted a package to help facilitate...

    Market moves    29 April 2020
  • Inventory ABS prepped

    Sector developments and company hires

    Inventory ABS prepped Fintech platform Supply@ME Capital (SYME) has entered into an agreement with...

    Market moves    24 April 2020