Collateralized debt obligations

Among institutions objectives in originating CDO transactions are the following  

As noted previously, CLOs are backed by pools of bank loans and CBOs by portfolios of bonds. The two types of underlying assets differ in ways that affect the analyses of the securities they collateralize. Among the diflFerences are the following  

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In recent years, the valnation of certain synthetic instrnments, snch as credit default swaps (CDS), has become a routine task in financial markets. Meanwhile, variations on the core CDS product are emerging, and more complex instruments, such as synthetic collateralized debt obligations (CDOs), that use CDSs as building blocks for larger transactions continue to see analytic evolution. This chapter provides an introduction to the basics of pricing and explores some of the tools available to those involved in the synthetics market. 

The Pricing of Credit Default Swaps and Synthetic Collateralized Debt Obligations... 

The Collateral Advisor will also be obliged to proceed with the sale of Collateral Debt Obligations that fall below a required rating or are defaulted. 

The traditional concept of a custodian as explained above is applicable to those deal types that hold the assets noted. This is usually the case for ABCP programs (although these deals may be set up to fund exclusively trade receivable assets), collateralized debt obligations (CDOs), and special investment vehicles (SIVs). With certain forms of CDO transactions, the proceeds of issued notes are sometimes invested in collateral. This is also held by the deal custodian. In addition ABS deals may also... 

The Handbook of Financial Instruments edited by Frank J. Fabozzi Collateralized Debt Obligations Structures and Analysis by Laurie S. Goodman and Frank J. Fabozzi... 

Part Two discusses selected instruments traded in the debt capital markets. The products—hybrid secmities, mortgage-backed bonds, and callable bonds—have been chosen to give the reader an idea of the variety available in the market. Also described are index-linked bonds and a strucmred product known as a collateralized debt obligation (CDO). Some of the techniques for analyzing these more complex products are explained. 

The growth in the CDO market had been driven by large volumes of ABS CDO (collateralized debt obligations referencing ABS) and CLO (collateralized loan obligations) ... 

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