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.

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Friday, May 30, 2008

CAE wins contracts for five full-flight simulators valued at more than C$56 million

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Comtex

MONTREAL, QUEBEC, May 30, 2008 (MARKET WIRE via COMTEX) ----(NYSE: CGT)(TSX: CAE) - CAE has been awarded contracts to design and manufacture five full-flight simulators (FFSs) valued at more than C$56 million at list prices. The contracts are with Aeroflot Russian Airlines, Ansett Aviation Training, Skymark Airlines of Japan, and CAE's new training centre in Bangalore, India, which is a joint venture owned 50 percent by CAE. The company has now announced a total of 10 FFS sales year to date in fiscal year 2009.

"We have had a strong start to our fiscal year and we expect continued success by offering the industry's most comprehensive portfolio of simulation products ideally suited for pilot training programs," said Marc Parent, CAE's Group President, Simulation Products and Military Training & Services. "We're particularly pleased to welcome first-time customer Skymark to our long list of simulation equipment customers."

Aeroflot

Aeroflot Russian Airlines has ordered a CAE 5000 Series Airbus A320 FFS, which will be delivered later this year to its training centre in Moscow.

"Aeroflot has been operating a CAE-built A320 simulator for the past four years and we have been very satisfied with the high quality of the equipment and CAE's excellent customer support," said Mr. Prikhodchenko, Director of Aeroflot's Training Centre. "When we decided to add another A320 device to our facility, we evaluated CAE's new 5000 Series full-flight simulator and once again came to the decision that CAE should be our supplier."

Skymark

Skymark Airlines of Japan has ordered a CAE 7000 Series Boeing 737-800 FFS, which will be delivered in 2009. It is the first simulator CAE has sold to Skymark, a low-fare carrier based in Tokyo, Japan.

Ansett Aviation Training

CAE will provide a CAE 7000 Series Airbus A320 FFS to Ansett Aviation Training, an independent training facility located in Melbourne, Australia. This is the second A320 simulator CAE has sold to Ansett and it will be delivered later this year.

"Ansett Aviation Training continues to expand with our new training facility close to completion where we will provide a first-class training experience across a range of aircraft types," said David Gilmour, Director of Ansett Aviation Training. "We are pleased to work again with CAE in providing an enhanced training opportunity for A320 operators and their crews."

CAE Bangalore training centre

CAE signed a contract with the joint venture company that will own and operate the new CAE Bangalore training centre in India. CAE owns 50 percent of the joint venture company. CAE will provide two CAE 7000 Series full-flight simulators: one A320 FFS and one Boeing 737NG FFS. In addition, CAE will provide a CAE Simfinity(TM) Airbus Pilot Transition (APT) trainer. The simulators are scheduled to be delivered this summer.

CAE is a world leader in providing simulation and modelling technologies and integrated training solutions for the civil aviation industry and defence forces around the globe. With annual revenues exceeding C$1 billion, CAE employs more than 6,000 people at more than 75 sites and training locations in 20 countries. We have the largest installed base of civil and military full-flight simulators and training devices. Through our global network of 27 civil aviation and military training centres, we train more than 75,000 crewmembers yearly. We also offer modelling and simulation software to various market segments and through CAE's professional services division, we assist customers with a wide range of simulation-based needs. www.cae.com

Notes to Editors:

Following are some details on the technical features of the full-flight simulators for each customer:

   Aeroflot - Type: CAE 5000 Series A320 - Visual: CAE Tropos(TM)-6000 with liquid crystal on silicon (LCoS) projectors - Motion:
   CAE True(TM) electric motion system Skymark - Type: CAE 7000 Series B737-800 - Visual: CAE Tropos-6000 with LCoS projectors
   - Motion: CAE True electric motion system - Other features: CAE True Environment, a dynamic and comprehensive automated air
   traffic control (ATC) environment Ansett Aviation Training - Type: CAE 7000 Series A320 - Motion: CAE True electric motion
   system CAE India aviation training center - Types: CAE 7000 Series A320 and B737NG FFSs - Visual: CAE Tropos-6000 with LCoS
   projectors - Motion: CAE True electric motion system

 Contacts: CAE contacts: Nathalie Bourque Vice President,
   Public Affairs and Global Communications 514-734-5788 nathalie.bourque@cae.com Trade media: Chris Stellwag Director, Marketing
   Communications, Simulation Products and Military Training & Services 813-887-1242 chris.stellwag@cae.com Investor relations:
   Andrew Arnovitz Vice President, Investor Relations and Strategy 514-734-5760 andrew.arnovitz@cae.com

SOURCE: CAE Inc.

mailto:nathalie.bourque@cae.com mailto:chris.stellwag@cae.com mailto:andrew.arnovitz@cae.com

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