Collateralized loan obligation (CLO) - Financial definition
Concise definition of the term collateralized loan obligation
A form of securitization where loans are pooled together by a bank or other financial institution and sold to a special purpose vehicle (SPV). The SPV issues securities using the loans as collateral.
Comprehensive definition of the term collateralized loan obligation
Securitizations such as CLOs allow banks to reduce the size of their balance sheet and thus to free capital for the conduct of additional business.