Collateralized Bond Obligation
- Collateralized Bond Obligation
A Collateralized Bond Obligation is an investment-grade bond backed by a pool of junk bonds. Junk bonds are typically not investment grade, but because they pool several types of credit quality bonds together, they offer enough diversification to be "investment grade." [ cite web |url=http://www.investopedia.com/terms/c/cbo.asp |title=Collateralized Bond Obligation at Investopedia |accessdate=2007-04-28]
They are similar in structure to a collateralized mortgage obligation (CMO), but different in that CBOs represent different levels of credit risk, not different maturities.
External links
* [http://www.fanniemae.com/mbs/index.jhtml;jsessionid=CFELIJNC4BNWTJ2FECISFGQ?p=Mortgage-Backed+Securities FannieMae's Mortgage-Backed Securities page, including an MBS locator by CUSIP, Pool or Trust Number]
References
Wikimedia Foundation.
2010.
Look at other dictionaries:
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Collateralized Bond Obligation - CBO — An investment grade bond backed by a pool of junk bonds. Junk bonds are typically not investment grade, but because they pool several types of credit quality bonds together, they offer enough diversification to be investment grade. Similar in… … Investment dictionary
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collateralized mortgage obligation — ( CMO) A type of MBS created by dividing the rights to receive the principal and interest cash flows from an underlying pool of mortgages into separate classes or tiers. The tiers or classes are usually called tranches. In other words, it is a… … Financial and business terms
