Collateralized Bond Obligation


Collateralized Bond Obligation

A Collateralized Bond Obligation is 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." [ cite web |url=http://www.investopedia.com/terms/c/cbo.asp |title=Collateralized Bond Obligation at Investopedia |accessdate=2007-04-28]

They are similar in structure to a collateralized mortgage obligation (CMO), but different in that CBOs represent different levels of credit risk, not different maturities.

External links

* [http://www.fanniemae.com/mbs/index.jhtml;jsessionid=CFELIJNC4BNWTJ2FECISFGQ?p=Mortgage-Backed+Securities FannieMae's Mortgage-Backed Securities page, including an MBS locator by CUSIP, Pool or Trust Number]

References


Wikimedia Foundation. 2010.

Look at other dictionaries:

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