Synthetic Collateralized Debt Obligation
An artificial collateralized debt obligation that is backed by a pool of credit derivatives.
Investopedia Commentary
Rather than the traditional pools of assets such as bonds and loans, the pools of credit derivatives that back synthetic CDOs include instruments such as credit default swaps, forward contracts and options.
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See also: Collateralized Bond Obligation - CBO, Collateralized Debt Obligation - CDO, Collateralized Loan Obligation - CLO, Credit Default Swap, Credit Derivative, Forward Contract, Synthetic