Welcome to the major leagues of debt. Collateralized debt obligations, almost always referred to as a CDOs, are horrendously complicated deals that often leave anyone without a MBA wondering what was put into these CDOs.

The first thing to understand about bonds, (aka debt) is that bonds are often backed by something else. Think about your home mortgage. If you don't pay your mortgage, the bank can take the house. You end up homeless, and the bank sells the house to pay off the rest of that mortgage. There is something "backing" that mortgage; something lender can fall back on, if you don't pay your bills like a good human being. That's called collateral.

CDOs are one flavor of an entire sector of investing called structured finance, and they are also backed. CDOs, in the simplest concept, are just bonds backed by something else. In most cases, a CDO is backed by a collection of various types of debt. CDOs can be home mortgages, or other types of debt like credit cards, auto loans, and personal loans. Most of these types of debt are usually considered a bit more risky and they don't have the backing that a home loan does. So, if you think it through, you can imagine that CDOs are usually considered a risky investment.

To take a step further, understand that CDOs have multiple flavors within each CDO. These flavors are called tranches. If you've taken French, you might recognize the word, it means "slice" or "portion." Each slice of that CDO you invest in is a little different and carries different amounts of risk.

You could invest in the lowest risk tranche of the CDO, which would provide you lower risk. But, you don't get a good return on that investment. Or, you can be the heroic adventurer of bonds and invest in the lowest-grade tranche of the CDO. You'll make an amazing return, but if the economy even looks at you wrong, you might lose the entire investment.

CDOs aren¿t easy, and are almost always invested in by mutual funds, insurance companies and hedge funds. As an individual investor, you will probably not come across a CDO you can participate in.

Home / Markets / Industries / Industrials

Sunday, July 06, 2008

ARCADIS Wins Job to Tackle Three Weak Spots in Dutch Coastal Defenses

Email this Story | Respond to Editor | Print

Comtex

AMERSFOORT, The Netherlands, Jul 06, 2008 (PR Newswire Europe via COMTEX) ----ARCADIS (EURONEXT: ARCAD), the international consulting, design and engineering company, announced on Sunday that it will tackle three weak spots in the Dutch coastal defenses in three different assignments. The weak spots in question are the Hondsbossche en Pettemer Zeewering, Katwijk and the Dunes in the northern part of the province of North-Holland for clients Waterboard Rijnland and Hollands Noorderkwartier. These represent the three remaining weak spots in the coastal defenses of the ten which were discovered in 2003 following studies undertaken at the time. The combined value of these three projects for ARCADIS is EUR 1.7 million.

The Waterboard of the Rijnland sought the advice of ARCADIS with regard to strengthening the coast at Katwijk. The primary dike is a kind of a ring dike through the old village of Katwijk aan Zee and needs to be strengthened in order to ensure the security of the province of Zuid-Holland in the long term. ARCADIS will produce a starting document as well as a project note and environmental impact assessment (EIA) on behalf of the client. In close cooperation with the client and the local inhabitants, a number of scenarios for strengthening the coast will be developed. The goal is to develop one favored alternative for a safe coast which also gives an impulse to spatial developments in Katwijk.

For the Waterboard of the region Hollands Noorderkwartier, and the province of Noord-Holland, ARCADIS has compiled a project note, an EIA and a plan to strengthen the Dunes of the northern part of North-Holland. The project area stretches from Petten to Huisduinen, known for its narrow row of dunes. These dunes no longer meet the high safety demands. Even though safety is a key issue, a preferred alternative is being worked out which provides extra room for opportunities in spatial quality.

For the same clients, ARCADIS is putting together the project note/EIA and dike strengthening plan for the Hondbossche and Pettemer Sea Wall. Improvement measures are necessary for a distance of around 6km. The Sea wall is surrounded by nature reserves. For this reason, the strengthening process must offer extra spatial quality with emphasis on nature, landscape, cultural history, tourism, accessibility and the residential and living environment. The emphasis in the strengthening of these sea defenses, will be on safety, however.

According to Managing Director of ARCADIS in the Netherlands, Douwe Kras, research has revealed that the coast does meet safety norms in various parts. "In our country, the question of coastal protection is a matter of life and death. In other countries, demand for our water consultancy service is also increasing in relation to climate change issues. These projects on the Dutch coast are an excellent example of the further development of our wide knowledge and experience in our home market, with which we can further strengthen ARCADIS' name when pitching for foreign contracts. Water knowledge from the Netherlands is a step ahead internationally."

ARCADIS is an international company providing consultancy, design, engineering and management services in infrastructure, environment and buildings, to enhance mobility, sustainability and quality of life. ARCADIS develops, designs, implements, maintains and operates projects for companies and governments. With more than 13,500 employees and over EUR1.5 billion in gross revenue, the company has an extensive international network that is supported by strong local market positions.

http://www.arcadis.nl

Visit us on the internet: http://www.arcadis-global.com

For more information contact: Tim Preger, ARCADIS, tel: +31-06-2706-2406, e-mail: t.d.preger@arcadis.nl;
   Ad de Regt, Hollands Noorderkwartier, tel +31-299-663366