A Collateralized Bond Obligation (CBO) is an investment-grade bond backed by a pool of variously rated bonds, including junk bonds. CBOs represent different degrees of credit quality rather than different maturities.
A bond that receives a high rating for its creditworthiness from leading credit rating agencies, such as Standard & Poor’s (S&P) or Moody's. Typically rated AAA or AA, high-grade bonds are considered low-risk investments that provide reliable returns.
