The spread of collateral in the CDO market
Commodities, commercial real estate, project finance loans, FX - all these are types of collateral that have been packaged into CDOs
As investors as well as arrangers and managers became more comfortable with the mechanics of CDOs in the early years of this decade, they began to experiment with an increasingly diverse range of collateral types, which is why the acronym 'CDO' has become a generic term to describe a number of obligations that can be collateralised by bonds (CBOs), loans (CLOs) or other assets.
In 2004 Barclays Capital, for example, pioneered the development of the collateralised commodity obligation (CCO)
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