A single-tranche CDO (an exotic CDO product) with a premium starting at a pre-specified time in the future. It involves an investor selling credit protection on a CDO tranche starting at a future date and extending to the maturity date. Over the period between value date and maturity date, the product becomes a standard CDO.
Forward-starting CDOs come in two main types: forward-starting CDOs on fixed CDO tranche on the intial names (or reference entities or assets) and forward-starting CDOs on names having survived up to the forward-starting date.
