A CLO is a type of collateralized debt obligation.

Structured Finance ABS ABCP CMBS Covered Bonds RMBS Servicer Evaluations Structured Credit (incl.

When banks used the same device to securitize pools of corporate loans, the natural term to use was collateralized loan obligations or CLOs. As noted earlier, a CRE CLO is a hybrid between a CMBS securitization transaction and a CLO transaction. Mortgage-backed Securities (MBS): any kind of asset-backed security where the underlying assets are mortgages.

... to the collateralized loan obligation owners. Secondary markets The post-issuance trading or buying and selling of instruments, including, but not exclusively, asset-backed securities or ABS; commercial or residential mortgage-backed securities or MBS or CMBS or RMBS; collateralised debt obligations or CDOs; and collateralised loan obligations or CLOs takes place in the secondary market. They are distinct but overlapping categories.

CMBS can also be negatively affected by weakness in the real estate market, as was the case in 2008 and 2009. First, the underlying collateral is appealing.

Each class of owner may receive larger yields in exchange for being the first in line to risk losing money if the businesses fail to repay the loans that a CLO has purchased.

The constitution of today’s CRE CLO collateral is quite dif-ferent from the collateral underlying CMBS transac- Leveraging. The term CDO owes its origin to the collateralized mortgage obligation 48 (CMO) market where RMBS transactions migrated from a pure pass-through form to use the bond or obligations form, backed or collateralized by a pool of mortgages. There are a number of structural features that make a CRE CLO enticing. Conduit CMBS was the dominant type of commercial real estate securitization in the last real estate cycle: In 2007, the busiest year ever for CMBS, conduit issuance totaled $188.47 billion, representing nearly 81% of the total volume of CMBS, CRE CLOs and agency securitizations.

For example, commercial mortgage-backed securities issued during a market peak or at a time when underwriting standards were low are likely to pose higher risks. CLO) 06/01/2020 Under Stress: Assessing CLO Manager Performance During COVID-19

At the level of definitions, the other answers saying CLOs are a subset of CDOs are technically correct (they would be a subset since loans are a subset of debt).