Difference between CDOs and CLOs???

jtimbers3 · #1 (**permalink**) 07-26-2009, 08:36 PM

So I get that Collateralized Debt Obligations and Collateralized Loan Obligations are securities where the underlying assets are a variety of debts and loans, and the payments come from those. But what exactly is the difference between debt and loans? I thought a companies debt was just loans they had taken from other people/companies. They arent the same thing?

sapphirecapital · #2 (**permalink**) 07-26-2009, 10:54 PM

easy, in a CDO you have a direct debt of the issuer which is collateralized, in a CLO you have the lender putting the loan together

jtimbers3 · #3 (**permalink**) 07-27-2009, 03:01 AM

aahh, i see. appreciate it

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