The emergence of a CDO market

Collateralisation of debt first appeared in the 1980s, but the rapid evolution of CDOs really began in the 1990s, when a maturing market prompted the use of an increasingly broad range of asset classes as collateral

In basic terms, the concept of any collateralised obligation is similar to that which underlines common investment vehicles such as investment trusts, in that it is a means of providing investors with exposure to a portfolio of securities via a single transaction.

Since the market for these vehicles began to evolve in the US in the early 1980s, those portfolios have offered investors exposure to an array of asset classes, ranging from investment-grade and high yield bonds (in collateralised bond