Collateralized Bond Obligation - CBO

What Does Collateralized Bond Obligation - CBO Mean?
An investment-grade bond backed by a pool of junk bonds. Junk bonds are typically not investment grade, but because they pool several types of credit quality bonds together, they offer enough diversification to be "investment grade."

Investopedia explains Collateralized Bond Obligation - CBO
Similar in structure to a collateralized mortgage obligation (CMO), but different in that CBOs represent different levels of credit risk, not different maturities.

Related Terms

Asset-Backed Commercial Paper
Bond
Collateralized Borrowing And Lending Obligation - CBLO
Collateralized Debt Obligation - CDO
Collateralized Mortgage Obligation - CMO
Investment Grade
Junk Bond
Structured Finance
Synthetic Collateralized Debt Obligation
More Related Terms

Related Links

Junk Bonds: Everything You Need To Know - Don't be fooled by the name - junk bonds may be for you if you know how to analyze them.
Bond Basics Tutorial - Investing in bonds - What are they, and do they belong in your portfolio?
What is the difference between a CMO and a CBO?

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