Collateralized Loan Obligation - CLO

What Does Collateralized Loan Obligation - CLO Mean?
A special purpose vehicle (SPV) with securitization payments in the form of different tranches. Financial institutions back this security with receivables from loans.

Investopedia explains Collateralized Loan Obligation - CLO
Collateralized loan obligations are the same as collateralized mortgage obligations (CMOs) except for the assets securing the obligation. CLOs allow banks to reduce regulatory capital requirements by selling large portions of their commercial loan portfolios to international markets, reducing the risks associated with lending.

Related Terms

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Car Title Loan
Collateralized Debt Obligation - CDO
Collateralized Mortgage Obligation - CMO
Loan Participation Note - LPN
Securitization
Special Purpose Vehicle - SPV
Structured Finance
Synthetic Collateralized Debt Obligation
Tranches
More Related Terms

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