Collateralized Bond Obligation. An investment-grade bond backed by a large,...
Collateralised Bond Obligation. A collateralised bond obligation (CBO) is an investment-grade bond backed by a pool of junk bonds. This sounds a bit odd because junk (otherwise known as high yield) bonds are, by definition, not investment grade. However, because a CBO pools several types of credit quality bonds together it offers enough diversification to be "investment grade". CBOs are similar in structure to a collateralised mortgage obligation (CMO), but different in that CBOs represent different levels of credit risk, whereas CMOs represent different types of maturity.
a CDO backed by or referenced to corporate bonds
Is a Collateralized Bond Obligation. It is similar in structure to a CMO deal.
Collateralized Bond Obligation. Investment-grade bonds backed by a collection of junk bonds with different levels of risk, called tiers, that are determined by the quality of junk bond involved. CBOs backed by highly risky junk bonds receive higher interest rates than other CBOs.
Collateralized Bond Obligation. A multi-tranche, pay-through debt security employing a pool of high yield corporate bonds as collateral. The corporate bond portfolio is highly diversified by both issuer and industry. Principal and interest payments on the underlying corporate bonds are used solely to meet CBO principal and interest obligations. The CBO is divided into several debt tranches and an equity portion. Similar to other asset-backed securities, the CBO structure is flexible and the debt may be structured in a variety of ways to satisfy investor cash flow requirements. A typical structure includes an A-rated senior secured tranche, a BB-rated second secured tranche and a Z-tranche. The secured tranches are normally sold to investors while the Z-bonds and equity portion are retained by the CBO sponsor. Currently, due to restrictions imposed by the Investment Company Act of 1940, CBOs are traded as private placements.
Collateralized Bond Obligation. Securities issued against a portfolio of bonds with different degrees of credit quality.
Collateralised bond obbligation. Cash flow bond issued against a pool of bond assets or other securities.
collateralized bond obligation. A type of bond that is secured by and represents a share in a portfolio of bond investments.