Glossary of Municipal Securities Terms

COLLATERALIZED DEBT OBLIGATION (CDO)

Asset-backedĀ securities consisting of securitized interests in pools of non-mortgage assets backed by bonds, loans, or other assets. Typically, multiple classes or tranches of CDOs are issued secured by the same pool of assets. The payments from the pool are applied to payments on the various classes of CDOs in a pre-determined order of priority.

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