what are mezzanine CDO's?

I read that CDO's played a major role in the credit crisis of 2008. I would like to know what they are.

  • Nikhil
  • 28 Apr 2020
  • 1616 Views
  • 4 Answers
Your Answer

Hi,
A collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS). Originally developed for the corporate debt markets, over time CDOs evolved to encompass the mortgage and mortgage-backed security ("MBS") markets.[2]
Like other private label securities backed by assets, a CDO can be thought of as a promise to pay investors in a prescribed sequence, based on the cash flow the CDO collects from the pool of bonds or other assets it owns
 

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