Collateralized Debt Obligationとは 意味・読み方・使い方

Collateralized debt obligations (CDOs) are a type of structured asset-backed security (ABS) with multiple tranches that are issued by special purpose entities and collaterized by debt obligations including bonds and loans. Each tranche offers a varying degree of risk and return so as to meet investor demand. CDOs' value and payments are derived from a portfolio of fixed-income underlying assets. CDOs securities are split into different risk classes, or tranches, whereby "senior" tranches are considered the safest securities. Interest and principal payments are made in order of seniority, so that junior tranches offer higher coupon payments (and interest rates) or lower prices to compensate for additional default risk.