The term CDO (Collateralized Debt Obligation) refers to portfolios of fixed-income securities that belong to the group of asset-backed securities and structured credit products. The portfolio contains different tranches of securities, a so-called senior tranche, a mezzanine tranche and the equity tranche. The tranches differ in terms of default risk. The tranche with the highest default risk (lowest rating) receives the highest coupon, but losses are also charged to the equity tranche first. Many banks refinance themselves on the capital market with the help of CDOs.