Collateralized Loan Obligation (CLO)
A special purpose vehicle (SPV) with securitization payments in the form of different tranches. Financial institutions back this security with receivables from loans. Investopedia Says:
Identical to a CMO except for the assets securing the obligation. CLOs allow banks to reduce regulatory capital requirements by selling large portions of their commercial loan portfolios to international markets, reducing risks associated with lending. Related Terms:
Collateralized Debt Obligation - CDO
Collateralized Mortgage Obligation - CMO
Loan Participation Note - LPN
Portfolio
Reserve Requirements
Securitization
Special Purpose Vehicle - SPV
Structured Finance
Synthetic Collateralized Debt Obligation
Tranches |