Business and Personal Finance Dictionary

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• ARBITRAGE CDO
  
  A CDO whose purpose is to allow a money manager to expand assets under management and equity investors to achieve non-recourse leverage to CDO assets. There is no "arbitrage" in the classic sense of the word. Rather, equity holders hope to capture the difference between the after-default yield on the assets and the financing cost due debt tranches. See collateralized debt obligation (CDO).
  
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