Primary Collateralized Bond Obligation is a kind of Asset-Backed Security (ABS) backed by a variety of corporate bonds with varying degrees of risks and coupon rates. KODIT provides P-CBO guarantee to facilitate financing to companies more efficiently by guaranteeing the repayment of their corporate bonds indirectly. P-CBO guarantee was first introduced in July 2000 when the Korean bond market was severely damaged after the currency crisis which started in the late 1990s. KODIT, with its strong credibility in the financial market, launched P-CBO guarantee, combining the mechanisms of ABS and credit guarantees. P-CBO guarantee facilitated corporate financing at lower cost and allowed institutional investors to purchase low risk bonds, thereby helping to restore the confidence of the market participants and to stabilize the crunched Korean corporate bonds market. KODIT also introduced Collateralized Loan Obligation (CLO) guarantee in December 2000. The scheme of CLO guarantees is basically the same with the P-CBO guarantees, except that the underlying assets of CLO guarantees are the loans instead of corporate bonds. The procedure of P-CBO/CLO guarantees is as follows. First, a securities company (originator) makes the pooling of corporate bonds or loans with close cooperation with KODIT. Then a special purpose company (SPC) is set up to purchase the pooled corporate bonds/loans. The SPC securitizes the pooled assets by issuing CBOs in two different tranches : senior and subordinated. To upgrade the rating of senior CBOs to AAA, KODIT provides guarantees. The senior CBOs are sold to investors, while the subordinated CBOs are repurchased by the issuing companies according to their credit ratings.