what is CDO - Collateralized Debt Obligations and how are they traded?

[inkosis]

Hello all
Need your help understanding what this. My brother's friend has a fund which does the below.

xxxxx Limited on the launch of what is xxxx Ltd, the first structured CDO to raise finance through the repo markets, breaking new ground in the structured product market.
xxxx are a leading ABS house.

xxx is a €1.5 billion CDO backed by a pool of high quality asset-backed securities and the securitisation will combine xxxxx's expertise in the selection of prime assets with its extensive knowledge of the repo markets.
​

In addition to the repo financing, four classes of Notes have been issued by xxxx Ltd, and listed on the Dublin Stock Exchange (with ratings by Moody’s and Standard & Poor's). The structured financing comprises:
​

•£1,500,000,000 Repo program rated A-1+ by Standard & Poor's. •€45,00,000 Class A Senior Secured Floating Rate Notes due 2052 rated Aaa/AAA.•€30,000,000 Class B Senior Secured Floating Rate Notes due 2052 rated Aa2/AA.•€18,750,000 Class C Mezzanine Secured Floating Rate Notes due 2052 rated Baa2/BBB+. •€11,250,000 Class D Subordinated Secured Floating Rate Notes due 2052.

There has been 100% take-up of all of the Notes.
​

It makes absolutly not sense to me, and i was hoping someone to tell me exactly what this is. From what's i've read it seems that basically they are selling coporate debt i.e. bonds am i right?

Does anyone do this? And how can i find out more?

Thanks
sammy

 

[RedE]

See http://www.riskglossary.com/articles/collateralized_debt_obligation.htm