1. MBS: Mortgage-backed bonds or mortgage loan securitization.

MBS is the earliest type of asset securitization.

It was first produced in the United States in the 1960s.

Purpose: Use the regular cash inflows of principal and interest from the loan pool to issue securities, and the securities are guaranteed by government agencies or government-backed financial institutions.

2. CDO: an important part of the asset securitization family.

Its underlying assets are usually credit assets or bonds.

Purpose: Usually the founding bank groups together assets with cash flow, then packages and divides the assets, transfers them to special purpose vehicles (Special Purpose Vehicle), and sells fixed income securities or beneficiary certificates through private placement or public issuance.

3. ABS asset-backed securities are issued by a trustee institution and represent the trust beneficial interest shares of a special purpose trust.

The trustee shall bear the obligation to pay the income from the asset-backed securities to the investment institution within the limit of the trust property.

Its payments are basically derived from the cash flows generated by the asset pool backing the securities.

Purpose: Credit assets are entrusted to a trustee, and income securities issued by the trustee are used to pay the income from the cash generated by the property.

In other words, asset-backed securities are shares of trust income rights issued by a special purpose trust trustee institution and represent the trust income rights of a special purpose trust.

The trust institution shall bear the obligation to pay the income of the asset-backed securities to the investment institution within the limit of the trust property.

4. CLO: Collateralized loan obligations are products in which a large number of loans are securitized and then split and sold to different investors.

Purpose: Collateralized loan bonds are products in which a large number of loans are securitized and then split and sold to different investors.

The interest and principal returned by the loan are not evenly distributed to all CLO holders. The holders are divided into different levels, called tranches. Different levels have different yields and different risks.

There are levels designed for conservative investors (lower risk, lower returns, similar to the debt form CLO in the article), and there are levels designed for investors with higher risk appetite (higher risks, higher returns, similar to the equity in the article)

form CLO).

Extended information: Basic characteristics of bonds: 1. Repayment Repayment means that the bond has a specified repayment period, and the debtor must pay interest and repay the principal to the creditor on time.

2. Liquidity Liquidity means that bond holders can flexibly transfer bonds according to needs and actual market conditions to recover principal in advance and realize investment returns.

3. Safety Safety means that the interests of bond holders are relatively stable and do not change with changes in the issuer's operating income, and the principal can be recovered on schedule.

4. Yield Yield means that bonds can bring a certain amount of income to investors, that is, the return of bond investment.

In actual economic activities, bond income can take three forms: first, investing in bonds can bring interest income to investors regularly or irregularly; second, investors can take advantage of changes in bond prices and earn the difference by buying and selling bonds; third,

It is the interest income from the reinvestment of cash flows from investing in bonds.