col·lat·er·a·lized debt obligation (k?-l?t??r-?-l?zd?)n. Abbr. CDO A financial security collateralized by a portfolio of bonds, loans, or swaps of different maturities and credit quality and issued in tranches representing the order in which losses from the portfolio are distributed.American Heritage® Dictionary of the English Language, Fifth Edition. Copyright © 2016 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.collateralized debt obligation n (Banking & Finance) a debt security collateralized by a number of debt obligations including loans and bonds of different credit quality and maturity. Abbreviation: CDO Collins English Dictionary ? Complete and Unabridged, 12th Edition 2014 © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003, 2006, 2007, 2009, 2011, 2014