The New Choice in Global Reinsurance. CDO: Collateralized Debt Obligation. Contents. Why CDOs? What is a CDO Examples and Types of CDOs Advantages & Disadvantages New Solutions Approach Conclusion. Why Consider CDOs?. Fastest Growing Sector of the Asset Backed Securities Market (ABS)
Pool of Diversified Debt Obligations is Packaged and Sold to the Capital Markets
The CDO Issues Multiple Layers/Tranches of Securities: Senior, Mezzanine, Equity (First Loss)
Payments to CDO Tranches depend on the performance of the Underlying Portfolio of Assets
Underlying Portfolio can be - Real or Synthetic; Actively Managed or PassiveWhat is a CDO?
Senior Fixed or
Diversified Pool of
Fixed or Floating Rate
A High Yield CLO arranged by Bear Sterns.
CDO arranged by Bear Sterns where underlying collateral is investment grade.
(Meliorbanca Parthenon I)
Equity to AAA 87.5M
Weighted Average Coupon of Underlying Securities > Weighted Average Coupon of Repackaged Securities
Financial Institutions can achieve Capital Relief by securitizing balance sheet assets
CDOs Have Been Issued For: