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

Tuesday, July 01, 2008

AZURE DYNAMICS CORPORATION - Re Agreement

Email this Story | Respond to Editor | Print

Comtex

Jul 01, 2008 (PR Newswire Europe via COMTEX) ----

Attention Business Editors: Azure Dynamics signs first full Sales & Service agreement with Palmetto Truck Center
   OAK PARK, MI, June 30 /CNW/ - Azure Dynamics Corporation (TSX: AZD, LSE: ADC & OTCQX: AZDDF) - ("Azure" or the "Company"),
   a leading developer of hybrid electric and electric powertrains for commercial vehicles, announced today it has signed its
   first dealer, Palmetto Truck Center, with a Sales & Service agreement. The agreement allows Palmetto to serve growing
   market demand for Azure's new fuel efficient, low maintenance and environmentally friendly Balance Hybrid Electric E450 commercial
   vehicle. The Balance Hybrid Electric is integrated on Ford's E450 Cutaway and Strip Chassis drive system managing the conventional
   5.4 litre Triton gasoline engine and the 5-speed automatic TorqShift transmission. The hybrid powertrain features electric-launch
   assist, engine-off at idle and regenerative braking improving the vehicle's fuel economy by up to 40 percent, reducing maintenance
   cost by up to 30 percent and minimizing greenhouse gas emissions. "We sought a dealership partner that has proven excellence
   in the commercial truck market," said Jay Sandler, Vice President of Sales for Azure Dynamics. "Palmetto immediately understood
   the significant value proposition of the Azure Balance Hybrid Electric vehicle. Together, we are eager to take our product
   to market in South Florida and beyond." Azure Dynamics plans to sign approximately 50 dealers in the next year in major metro
   markets in the United States and Canada. The Company has already identified 33 initial target markets. Prior to the Palmetto
   relationship, Azure had been selling direct to market. However, expected demand and recently announced orders from major fleet
   owners like AT&T and FedEx have encouraged the Company to broaden its distribution network by partnering with highly-regarded
   commercial vehicle specialists. For more information about Azure Dynamics and its family of hybrid electric and electric commercial
   vehicles, please visit www.azuredynamics.com. About Azure Dynamics Azure Dynamics Corporation (TSX: AZD) (LSE: ADC) (OTCQX:
   AZDDF) is a world leader in the development and production of hybrid electric and electric components and powertrain systems
   for commercial vehicles. Azure is strategically targeting the commercial delivery vehicle and shuttle bus markets and is currently
   working internationally with various partners and customers. The Company is committed to providing customers and partners
   with innovative, cost-efficient, and environmentally-friendly energy management solutions. For more information please visit
   www.azuredynamics.com. About Palmetto Truck Center Palmetto Truck Center, Inc. is a second generation family-owned and operated
   truck dealership. Serving the South Florida community since 1966, Palmetto Truck Center is the largest Ford wholesale parts
   distributor in Miami-Dade and Broward Counties servicing businesses throughout the area and exporting to countries around
   the world. While the dealership specializes in all size commercial truck sales, it has a sizeable retail business featuring
   sport utility vehicles, vans and light trucks. The TSX and LSE Exchanges do not accept responsibility for the adequacy or
   accuracy of this release. Forward-looking Statements This press release contains forward-looking statements. More particularly,
   this press release contains statements concerning Azure's business development strategy, projected commercial revenues and
   product deliveries. The forward-looking statements are based on certain key expectations and assumptions made by Azure, including
   expectations and assumptions concerning achievement of current timetables for development programs, target market acceptance
   of Azure's products, current and new product performance, availability and cost of labour and expertise, and evolving markets
   for power for transportation vehicles. Although Azure believes that the expectations and assumptions on which the forward-looking
   statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Azure can
   give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions,
   by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently
   anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with Azure's
   early stage of development, lack of product revenues and history of losses, requirements for additional financing, uncertainty
   as to commercial viability, uncertainty as to product development and commercialization milestones being met, uncertainty
   as to the market for Azure's products and unproven acceptance of Azure's technology, competition for capital, product market
   and personnel, uncertainty as to target markets, dependence upon third parties, changes in environmental laws or policies,
   uncertainty as to patent and proprietary rights, availability of management and key personnel, and acquisition integration
   risk. These risks are set out in more detail in Azure's annual information form which can be accessed at www.sedar.com. The
   forward-looking statements contained in this press release are made as of the date hereof and Azure undertakes no obligation
   to update publicly or revise any forward-looking statements or information, whether as a result of new information, future
   events or otherwise, unless so required by applicable securities laws. For further information: Ryan Carr, Chief Financial
   Officer, (248) 298-2403, Email: rcarr(at)azuredynamics.com; Pat Liebler, Liebler!MacDonald, (313) 832-4376, Email: pat(at)lieblergroup.com;
   David Poutney, Stuart Skinner, Richard Kenny, Tel: +44 207 260 1000, Numis Securities Limited, Nominated Adviser to the Company
   (AZD.)(ACD) -30- END