collateralized debt obligation
(CDO)
Noun
A structured pay-through security created by a special purpose vehicle (SPV) that buys an originator’s receivables or other financial assets that serve as collateral and that are ordered into multiple tranches (classes) by seniority and/or repayment time, with each tranche sold as a separate security having different rights over the portfolio and a different risk-return profile.
Synonym(s):
- cash CDO; cash collateralized debt obligation.