Broad Index Synthetic Trust Offering - BISTRO


DEFINITION of 'Broad Index Synthetic Trust Offering - BISTRO'

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.

BREAKING DOWN 'Broad Index Synthetic Trust Offering - BISTRO'

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.

  1. Credit Default Swap - CDS

    A particular type of swap designed to transfer the credit exposure ...
  2. Collateralized Debt Obligation ...

    An investment-grade security backed by a pool of bonds, loans ...
  3. Credit Derivative

    Privately held negotiable bilateral contracts that allow users ...
  4. Credit Risk

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

    The event in which companies or individuals will be unable to ...
  6. Synthetic CDO

    A form of collateralized debt obligation (CDO) that invests in ...
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