Collateralized Loan Obligation — a special-purpose vehicle that raises capital by issuing a tranched capital structure of rated debt (AAA through BB) and unrated equity, then uses the proceeds to purchase a diversified pool of broadly syndicated leveraged loans (BSL CLO) or directly originated middle-market loans (MM CLO). Cash flows are distributed via a waterfall, with two coverage tests — Overcollateralization (OC) and Interest Coverage (IC) — that, when breached, divert cash from equity to pay down the senior-most tranche until cured.