Definition of constant proportion debt obligation CPDO
A seriously complex financial instrument, invented in 2006 by ABN Amro, the Dutch bank, and designed to pay the same high interest rate as a risky junk bond while offering the highest possible credit rating. CPDOs use mathematical strategy to make a highly leveraged bet on the creditworthiness of companies. 
Essentially leveraged bets on a group of high-quality US and European companies. These vehicles issued securities and aimed to generate the funds they needed to pay out by selling protection on the two main indices of credit default swaps.