CDOs simple introduction

http://www.answers.com/topic/collateralized-debt-obligation learned: 1.structure-finance CDOs are collaterized by the cash flows of ABS 2.different from CBO or CMO, CDO represent different types of debt and credit risk 3.'balance sheet' type of CDOs is to remove the risky assets/loans off the balance sheet 4.collateral can be managed by asset managers, like AXA... 5.only synthetic CDOs has the flexibility to construct Single Tranche CDOs (bespoke CDOs) where the entire CDO is structured specifically for a single or small gropu of invetors. 6.waterfall capital structure can be sequential, pro rate, or hybid 7.collateral usually are non-mortgage loans and bonds. 8.a large portion of equity tranche investors are based in German, where certain funds are not required to value their holdings on mark-to-market basis.