An instrument that is created by means of a higher-level asset securitization which involves an additional degree of complexity through the creation of traded securities/ instruments by a securitization process. The instruments are structured into several classes with different characteristics (risk-reward profiles) and sold to investors who have their own investing and risk management requirements.
Specifically, structured instruments belong to the broader sphere of structured financing, that represents the pooling and repackaging of economic assets such as loans, bonds, and mortgages, in order to reallocate risks and obtain higher credit ratings. In so doing, a prioritized capital structure of claims (known as tranches) is issued against such collateral pools
Examples of structured instruments include structured bonds, structured notes, credit derivatives, etc.
