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.

• 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

• Grandfathering for Dutch CLO issuers

  Sector developments and company hires

  Grandfathering for Dutch CLO issuers The Dutch tax authorities have provided written confirmation t...

  Market moves    23 April 2020

• Moody's puts CLOs under review

  Sector developments and company hires

  Moody’s puts CLOs under review Moody's has placed on review for downgrade its r...

  Market moves    20 April 2020

• CMBS secured, unsecured sub debt weighed

  Sector developments and company hires

  CMBS secured, unsecured sub debt weighed Senior US CMBS loans with unsecured subordinate debt (s...

  Market moves    16 April 2020

• CLO stress scenario updated

  Sector developments and company hires

  CLO stress scenario updated Fitch is set to apply an updated stress scenario to all CLO portfolio...

  Market moves    7 April 2020

• 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