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.


  • Corporate trust service beefs up

    Stuart Draper has joined Global Loan Agency Services as director, business development. He was previ...

    Job Swaps    29 August 2014
  • European operations spun off

    Institutional Financial Markets Inc (IFMI) is to sell its European operations for approximately US$8...

    Job Swaps    22 August 2014
  • Record settlement agreed

    Bank of America has reached a comprehensive settlement with the US Department of Justice, certain fe...

    Job Swaps    22 August 2014
  • SCDO counterparty criteria released

    S&P has released criteria for assessing counterparty risk in terminating synthetic CDO and c...

    News Round-up    19 August 2014
  • Trups CDO cures continue

    The number of US bank Trups CDO combined defaults and deferrals decreased to 22.7% at end-July, comp...

    News Round-up    18 August 2014
  • SCI Start the Week - 18 August

    A look at the major activity in structured finance over the past seven days

    PipelineOnly a handful of deals joined the pipeline last week amid the summer lull. Of these transac...

    News    18 August 2014
  • CRE CDO manager transfer proposed

    The controlling class of Cedarwoods CRE CDO II is proposing to replace Angelo Gordon with Torchlight...

    Job Swaps    14 August 2014
  • ABS CDO auction due

    An auction has been scheduled for RFC CDO II on 29 August. The securities shall only be sold if the...

    News Round-up    8 August 2014
  • Conflict of interest

    Litigation activity turning towards trustees

    The focus of US financial crisis-related litigation activity is turning towards the trustee communit...

    News Analysis    8 August 2014
  • ABS CDO on the block

    An auction has been scheduled for Margate Funding I on 19 August. The securities shall only be sold...

    News Round-up    31 July 2014
  • ABS CDO manager replaced

    Dock Street Capital Management has replaced Fortis Investment Management as collateral manager to Or...

    Job Swaps    28 July 2014
  • Trups CDO index improves on cures

    The number of combined US bank Trups CDO defaults and deferrals decreased to 23.4% at end-June, comp...

    News Round-up    25 July 2014
  • Replacement CDO manager named

    Dock Street Capital Management has been selected as the replacement collateral manager for the Klero...

    Job Swaps    24 July 2014
  • Trups CDO sale due

    Bank of New York Mellon, as trustee for the Preferred Term Securities XII CDO, has retained Stifel,...

    News Round-up    22 July 2014
  • ABS CDO on the block

    An auction has been scheduled for Birch Real Estate CDO I on 23 July. The collateral shall only be s...

    News Round-up    16 July 2014
  • RFC issued on muni CDOs

    Moody's is seeking comments from market participants on its proposed rating approach for CDOs backed...

    News Round-up    16 July 2014
  • Citi settles RMBS, CDO claims

    Citigroup has agreed to settle an ongoing investigation by the RMBS Working Group. The agreement res...

    Job Swaps    15 July 2014
  • FDIC auction due

    The first in a series of private FDIC bank Trups CDO auctions has been scheduled for 17 July (SCI 24...

    News Round-up    15 July 2014
  • Japanese bank appoints CLO pro

    Steve Kahn has joined the CLO team at Mizuho Securities as an executive director in New York. He was...

    Job Swaps    14 July 2014
  • Rating agency liability confirmed

    The Full Federal Court of Australia last month dismissed an appeal by S&P, ABN Amro and Loca...

    Job Swaps    14 July 2014
  • ABS CDO manager replaced

    Dock Street Capital Management has replaced Strategos Capital Management as collateral manager on th...

    Job Swaps    3 July 2014