CDO-cubed

English

Alternative forms

• CDO cubed

Noun

CDO-cubed (plural CDO-cubeds)

1. (finance) A type of CDO (collateralized debt obligation) that invests in CDO-squareds.
   • 2005, Jan Job de Vries Robbé, Paul U. Ali, Securitisation of Derivatives and Alternative Asset Classes: Yearbook 2005, Kluwer Law International, page 41:

     Given the number of CDO Squared transactions in the marketplace, and the continued narrowing of corporate spreads, the emergence of CDO Cubed could be regarded as almost inevitable.

   • 2009, Les Leopold, The Looting of America: How Wall Street's Game of Fantasy Finance Destroyed our Jobs, Pensions, and Prosperity and What We Can Do About It, Chelsea Green Publishing, page 92:

     But what if you can't sell all the bottom tranches of the CDO-squared securities? You guessed it. You form another pool of those untouchables—called a CDO cubed—and tranche away again.

   • 2012, Oonagh McDonald, Fannie Mae & Freddie Mac: Turning the American Dream into a Nightmare, Bloomsbury Academic, page 317:

     A CDO squared is a CDO that only uses other CDOs as collateral. The CDO cubed is a special purpose vehicle with securitization payments in the form of tranches. A CDO cubed is backed by CDO squared tranches, allowing the banks to resell the credit risk they had taken once again by repackaging their CDO-squared.