In finance, a collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS) that pools together cash flow-generating assets, such as bonds, mortgages, and loans, and repackages this asset pool into "tranches" with varying risk profiles and coupon rates that are then marketed to sophisticated institutional investors. The pooled assets serve are the "debt obligations" that serve as the "collateral" for the CDO. In the event of a default, the "senior" tranches of the CDO have first priority in receiving collateral from the pooled assets. Accordingly, the senior tranches of a CDO generally have higher credit ratings and lower coupon rates than the riskier "junior" tranches.

Originally developed to securitize corporate bond markets, in the early 2000s CDOs became vehicles for refinancing mortgage-backed securities (MBS). By the mid-2000s, many CDOs came to hold large numbers of ABS backed by subprime mortgages, and played a major role in the creation of the subprime mortgage crisis.

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