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Collateralized Loan Obligation

An asset-backed security backed by the receivables on loans. Banks package and sell their receivables on loans to investors in order to reduce the risk coming from loan defaults. Returns on CLOs are paid in tranches; that is, the individual loans backing a CLO have different maturities, and investors are paid out as each matures. Banks offer higher interest rates to investors willing to buy CLOs backed by higher-risk loans. From a bank's perspective, in addition to reducing risk, CLOs also reduce their capital requirements by raising funds through the issue of CLOs. See also: Collateralized mortgage obligation.

computerized loan origination (CLO)

A computerized network of major lenders that uses artificial intelligence to evaluate loan application data entered online by agents and determine loan eligibility and terms.HUD has approved the procedure as long as there is full disclosure of the fee,multiple lenders are displayed on the screen to give borrowers freedom of choice,and the fee charged is a dollar amount rather than a percentage of the loan.

References in periodicals archive ?
Bank of America Merrill Lynch acted as the arranger for the CLO.
Lieutenant Governor Todd Lamb, vice chairman of the CLO board, commended Birdwell and agency staff for their achievement.
Often, the CLO offers the highest-paid and most professional position available to a family member overseas.
Citigroup Global Markets acted as the arranger for the CLO.
The CLO will be backed by a portfolio of primarily senior-secured leveraged loans and will have a four-year reinvestment period and a two-year non-call period.
Dean Fletcher, head of EMEA Corporate Trust, BNY Mellon, said, 'The European CLO market has recovered this year, for the first time since the financial crisis.
The CLO represents the largest CLO issued in the US since 2006, and the third largest CLO in history.
2014 has been a good year for us, this is our fifth CLO of the year and that demonstrates the strength of our platform both in Europe and in the US .
3bn in assets under management and expect to retain a leadership position in the CLO market,' said Greg Stoeckle, head of Invesco's Bank Loan business.
The degree of CE available to class A notes is below the average CE of recent 'AAAsf' CLO issuances; however, cash flow modeling results are in line with other Fitch-rated 'AAAsf' CLO notes.
M2 EQUITYBITES-May 8, 2017-Wellfleet Credit Partners closes 4th CLO offering