Glossary Term: COLLATERALIZED BOND OBLIGATION (CBO)
Definition(s) for COLLATERALIZED BOND OBLIGATION (CBO):
1. ) a derivative security collateralized by a pool of high-yield bonds. Several classes of these obligations are issued for a single pool of bonds with different classes offering different yields and a different degree of credit risk. Interest and principal repayments received on the bond portfolio are passed through to owners of the derivative securities.
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