what should the different cdo tranches tell an investor 
the tranches of a cdo reflect their risk profiles for example senior debt would have a higher credit rating than mezzanine and junior debt if the loan defaults the senior bondholders get paid first from the collateralized pool of assets followed by bondholders in the other tranches according to their credit ratings with the lowest rated credit paid last the senior tranches are generally safest because they have the first claim on the collateral 