Often referred to as a balance sheet CLO, a CDO in which an issuing bank sells exposures that are already on its balance sheet. This is in contrast to arbitrage CDOs, in which the arranger sets out to acquire exposures to take advantage of the difference between spreads on the underlying portfolio and spreads on the CDO liabilities. The first synthetic CDOs, issued in the late 1990s, were balance sheet transactions, designed to reduce banks' regulatory capital charge on loans on their books.