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.

• MPL ABS breaches liquidity covenant

  Sector developments and company hires

  EMEA BTIG has established a fixed income credit division in London to service clients across EMEA...

  Market moves    8 November 2019

• CMBS md recruited

  Sector developments and company hires

  North America Incapital has appointed William White as md, CMBS. Based in Boca Raton, he will rep...

  Market moves    6 November 2019

• Abacus case settled

  Sector developments and company hires

  Abacus case settled Judge Jennifer Frisch of the Minnesota District Court has terminated the Abacus...

  Market moves    29 October 2019

• Performance questions

  CMV conflict concerns aired

  Scepticism about whether CLO managers and their investment affiliates can be truly independent of ea...

  News Analysis    10 September 2019

• Counterintuitive results

  EBA consultation incentivises unfunded SRT format

  The EBA’s consultation on the determination of the weighted average maturity of a securiti...

  News Analysis    23 August 2019

• Syncora Guarantee acquired

  Sector developments and company hires

  Syncora sale GoldenTree Asset Management entity Star Insurance Holdings is set to acquire Syncora H...

  Market moves    15 August 2019

• Track record

  Middle market origination processes scrutinised

  A deteriorating credit environment is expected to prove challenging for new US middle market loan pl...

  News Analysis    9 August 2019

• Closer look

  US CRE CLOs are booming, but caution is advised

  A landmark US CRE CLO is currently marketing and grabbing investors’ attention. Away from...

  News Analysis    29 July 2019

• SCI Start the Week - 29 July

  A review of securitisation activity over the past seven days

  Transaction of the week Unusual securitisation backed by music rights collateral (SCI 23 July) SE...

  News    29 July 2019

• Ratings efficiency

  NAIC decision to boost CLO of one volumes?

  CLO of one activity is rising, as direct lenders seek to broaden their syndication channels and insu...

  News Analysis    26 July 2019

• US CLOs slow down

  US CLO market update

  Activity is easing up across the US CLO market driven by both macro and seasonal factors. &ldq...

  Market Reports    17 July 2019

• Simulation solution?

  Monte Carlo methodology utilised in effort to more accurately value CLO reset options

  New research takes a fresh approach to the longstanding issue of valuing call options in US CLOs. In...

  News    16 July 2019

• Investment chief appointed

  Sector developments and company hires

  Business Mortgage Finance 6 update Business Mortgage Finance 6, the issuer, has informed noteholde...

  Market moves    10 July 2019

• New deals surge

  Quarterly SCI data update

  2Q19 saw a surge in new issuance volume across securitisation markets either side of the Atlantic. T...

  News Analysis    10 July 2019

• Buy-side buy-in

  End-user use of complex credit on the increase

  The continuing need to search for yield is causing the buy-side to look beyond traditional credit. N...

  News Analysis    4 July 2019

• Pre-summer rush

  European ABS market update

  Activity levels are currently high across the European ABS/MBS and CLO markets and that looks set to...

  Market Reports    3 July 2019

• Line-up takes shape

  Middle market CLO seminar to include private debt panel

  The line-up for SCI’s 1st Annual Middle Market CLO Seminar on 26 June is taking shape. Sup...

  News    17 June 2019

• Alternative structures

  CLO managers seeking greater flexibility

  Managers’ desire for greater flexibility - in order to navigate the current challenging cr...

  News Analysis    10 June 2019

• Heading in the right direction

  US CLO market update

  The US CLO market is making up some lost ground after a tough start to the year. “We&...

  Market Reports    16 May 2019

• First SOFR-indexed MBS tranche inked

  Sector developments and company hires

  Claims predictability to improve? The Florida legislature last month passed a bill to reform the re...

  Market moves    2 May 2019

• Opportunities eyed

  Trups CDO manager targets Europe

  EJF Capital is eyeing opportunities in Europe, as bank consolidation pressures grow and rates contin...

  News    26 April 2019