Collateralized Bond Obligation - CBO
Definition of 'Collateralized Bond Obligation - CBO'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." |
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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. |
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