A collateralized debt obligation (CDO) is a complex financial product backed by a pool of loans and other assets and sold to institutional investors.

A collateralized debt obligation squared is a special purpose vehicle (SPV) with securitization payments backed by CDO tranches.

The CDO is "sliced" into sections known as "tranches", which "catch" the cash flow of interest and principal payments in sequence based on seniority. If some ...