ARBITRAGE COLLATERALIZED DEBT OBLIGATION

A COLLATERALIZED DEBT OBLIGATION (CDO) arranged by a BANK or SECURITIES FIRM to take advantage of perceived profit opportunities between assembling and managing a PORTFOLIO of credit risky securities or CREDIT DERIVATIVES and issuing TRANCHES to fund the portfolio. See also BALANCE SHEET COLLATERALIZED DEBT OBLIGATION, CASH COLLATERALIZED DEBT OBLIGATION,SYNTHETIC COLLATERALIZED DEBT OBLIGATION.

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