Collateralized debt obligation (CDO) - Financial definition
Financial acronyms
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Concise definition of the term collateralized debt obligation
A CDO is an asset-backed security backed by a diversified pool of debt securities.
Comprehensive definition of the term collateralized debt obligation
CDOs are classified as either cash CDOs or synthetic CDOs.
A cash CDO is backed by a pool of cash market debt securities. Synthetic CDOs also give the investor exposure to a pool of cash market debt instruments, but through the use of credit derivatives rather than the purchase if the cash market instruments.