| Collateralized Bond Obligation (CBO) |
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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".
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Similar in structure to a collateralized mortgage obligation
(CMO), but different in that CBOs represent different levels of credit risk, not different maturities. |
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