Collateralized Debt Obligations
/kəˌlætəˌrəˌlaɪzd dɛt ˌɒblɪˈɡeɪʃənz/
Definitions
- (n.) Structured financial instruments comprising pooled debt obligations divided into tranches with varying risk and return profiles, used for risk distribution and financing.
The investment firm purchased collateralized debt obligations to diversify its portfolio risk.
Forms
- collateralized debt obligations
- collateralized debt obligation
Related terms
See also
Commentary
In legal drafting, clearly distinguishing the risks and obligations associated with each tranche is crucial to address investor protection and regulatory compliance.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.