eli5: Collaterised Loan Obligations (CLOs)

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Can someone explain this to me please?

In: Economics

2 Answers

Anonymous 0 Comments

It’s an investment that acts like a bond, with buyer collecting interest payments. But instead of a loan to a single government entity or company, it’s a bundle of 1000’s of mortgages, car loans or other loans backed by collateral (ie. can take back asset being financed if payments not made)

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