Business A to Z

Collateralized Mortgage Obligation (CMO)


A security backed by a pool of pass-throughs, structured so that there are several classes of bondholders with varying maturities, called tranches. The principal payments from the underlying pool of pass-through securities are used to retire the bonds on a priority basis as specified in the prospectus. Related: mortgage pass-through security


Personal Finance Headlines

© 2005 The Washington Post Company