Broad Index Synthetic Trust Offering - BISTRO

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DEFINITION

Proprietary name used by J.P. Morgan for creating collateralized debt obligations (CDOs) from credit derivatives. The Broad Index Secured Trust Offering (BISTRO) was introduced in 1997 and was the predecessor to the synthetic collateralized debt obligation structure that become popular in the following years.

INVESTOPEDIA EXPLAINS

A synthetic CDO utilized credit derivatives as a means of transferring credit risk in a portfolio. Synthetic CDOs may be used by banks to manage risk capital and use credit default swaps rather than asset ownership. BISTRO is believed to be one of the first synthetic CDO instruments ever created.


RELATED TERMS
  1. Collateralized Debt Obligation ...

    An investment-grade security backed by a pool of bonds, loans and other assets. ...
  2. Credit Derivative

    Privately held negotiable bilateral contracts that allow users to manage their ...
  3. Credit Risk

    The risk of loss of principal or loss of a financial reward stemming from a ...
  4. Default Risk

    The event in which companies or individuals will be unable to make the required ...
  5. Synthetic CDO

    A form of collateralized debt obligation (CDO) that invests in credit default ...
  6. Credit Default Swap - CDS

    A swap designed to transfer the credit exposure of fixed income products between ...
  7. Collateralized Loan Obligation ...

    A security backed by a pool of debt, often low-rated corporate loans. Collateralized ...
  8. ISDA Master Agreement

    A standard agreement used in over-the-counter derivatives transactions.
  9. Residential Mortgage-Backed Security ...

    A type of security whose cash flows come from residential debt such as mortgages, ...
  10. Collateralized Mortgage Obligation ...

    A type of mortgage-backed security in which principal repayments are organized ...
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