1. The underlying assets (i.e. assets in the asset pool) are different:

(1) The asset pool of ABS (narrow sense) is the creditor's rights other than real estate mortgage, such as:

Credit card accounts receivable, rent, car loan claims, etc.

(2) The asset pool of 2)CDO is mainly some debt instruments, such as:

High-yield bonds, emerging market corporate bonds/national bonds, bank loans, narrow ABS, MBS, etc.

2. Different numbers of debtors:

(1) Traditional ABS has at least thousands of creditors.

(2) The number of creditors of 2)CDO is about 100~200, even less than 100.

3. The correlation requirements of the underlying assets are different:

(1) The assets of traditional ABS pay attention to homogeneity, and their creditor's rights are similar in nature and maturity date, and even hope to originate from the same founder, so as to properly grasp the form of cash flow.

(2) 2) The claims of CDO are heterogeneous and the sources cannot be the same. At the same time, the smaller the correlation between them, the better, so as to fully disperse risks.

4. In essence, ABS and CDO are both asset securitization products.

ABS, that is, AssetBackedSecurities, is a security issued by pooling assets other than real estate mortgage claims into an asset pool.

CDO, namely mortgage debt, is a new type of asset-backed securities.

It refers to an innovative derivative securities product based on mortgage debt credit and various asset securitization technologies, which reorganizes assets such as bonds and loans and re-divides investment income and risks to meet the needs of different investors.

Extended data:

The core design concept of CDO is grading, that is, developing products with different credit risks on the same pool of mortgaged assets:

★senior tranches)★MezzanineTranches)★equity tranches？ .

The repayment order of products at all levels is priority, intermediate level and equity level, that is, once the mortgage loan defaults and causes losses, the losses are first absorbed by the equity level, then the intermediate level and finally the priority.

Among them, the buyers with priority CDO include commercial banks, insurance companies, mutual funds, pension funds and other institutional investors with low risk appetite; The buyers of intermediate and equity CDOs are mainly institutional investors who pursue high risks and high returns, such as investment banks and hedge funds-this is also the first type of institutional investors who fell in this crisis. ?

References:

Baidu encyclopedia -CDO

Baidu encyclopedia -ABS