Mechanism for converting junk grade bonds into an investment grade asset based securities (ABS). Debt financing. In this process a bank’s portfolio of low-rated bonds, as the underlying collateral for an issue of CBO, is transferred to a specially created corporation or trust, called a special purpose vehicle or CPV. The corp or trust has no other assets and manages the transferred items. Typically, thebe is managed at two or more levels, called tiers or tranches, with a variety of rates of interest and degrees of risk.