In this paper I show that the standard deviation of a CDO implied hazard rate density increases with increased correlation between firms' default intensity processes. This is done by generating CDO tranches spreads from a model where firms' defaults are modelled by jump-diffusion hazard rate processes that are correlated through systematic jumps, correlation in the processes' random shocks, or both. The increase in the standard deviation of a CDO implied hazard rate density holds irrespective of how the jump-diffusion hazard rate processes' are correlated. In addition, model simulations indicate that systematic jumps that are rare and with large mean size are required to yield senior CDO tranche model spreads that are consistent with market quotes. This observations supports similar conclusions reported in the existing literature. Further to this, I propose a model where the default of one firm triggers the default of other firms. When the number of firms hit by this default is approximately 1/3 of a CDO's reference portfolio, I am able to produce model spreads that are within range of the extreme spreads observed during the 2007-2008 credit crisis. In addition, using a vector autoregression on daily observations, I provided evidence that lags of the standard deviation of the implied hazard rate density and the spread of the 3-month Eurodollar and 3-month T-Bill rates (TED spread) are factors for one-period ahead prediction of each other.