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An asset-backed security backed by a diversified pool of one or more classes of debt (corporate and emerging market bonds, asset-backed and mortgage-backed securities, real estate investment trusts and bank debt).
A CDO which derives all payments of principal and interest from the cash-flows of the underlying securities.
A CDO that does not actually own the pool of assets on which it has the risk. Stated differently a synthetic CDO absorbs the economic risks, but not the legal ownership, of its reference credit exposures.
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A CDO backed by two or more types of asset-backed securities.
Investment Portfolios:
A subset of the CDO market, where the issuer combines a selection of loans to create credit-enhanced claims against the cash flow proceeds originating from this portfolio, which are sold as securities to investors.
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