CDO Tranche – Fincyclopedia

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Collateralized Debt Obligation Tranche

The tranche of a CDO (collateralized debt obligation) that has its own risk characteristics and loss-absorption priority (seniority). There are...

Cross Subordination

A mechanism whereby various bespoke CDOs (bespoke tranches) can share the total subordination provided by the whole set of bespoke...

Size of First Loss

An alternative term for attachment point; the lower tranche boundary that specifies, in addition to the upper tranche boundary (detachment...

Bespoke CDO Tranche

A tranche of a collateralized debt obligation (CDO) for which terms and features can be customized. The CDO can also...

Synthetic CDO Tranche

A tranche (CDO tranche) of a synthetic CDO; a structured product that is based on an underlying portfolio of equally...

Exhaustion Point

The upper tranche boundary that specifies, in addition to the lower tranche boundary (attachment point), a collateralized debt obligation tranche...

Fixed Leg of CDO Tranche

The fixed leg of a CDO tranche is the present value of the amount of principal (capital) that the protection...

Premium Leg of a CDO Tranche

The premium leg of a CDO tranche is the present value of the amount of principal (capital) that the protection...

ABS

It stands for asset backed security; a security that is created by means of a process called "securitization"- the creation...

Asset-Backed Security

A security that is created by means of a process called "securitization"- the creation of securities backed by pools of...