Collateralized Bond Obligation - CBO
What Does Collateralized Bond Obligation - CBO Mean?
An investment-grade bond backed by a pool of junk bonds. Junk bonds are typically not investment grade, but because they pool several types of credit quality bonds together, they offer enough diversification to be "investment grade."
Investopedia explains Collateralized Bond Obligation - CBO
Similar in structure to a collateralized mortgage obligation (CMO), but different in that CBOs represent different levels of credit risk, not different maturities.
