At one time, collateralized debt obligations (CDOs) were considered part of the asset-backed securities market. The reason was that like asset-backed securities (ABS), CDOs employed the securitization technology to pool assets and finance the purchase of that pool of assets by issuing securities (the CDOs). However, there are several elements that distinguish CDOs from the ABS we reviewed in earlier chapters. In this chapter, we explain CDOs. We begin the chapter with a discussion of why they require a separate study than ABS.