Tranches
A piece, portion or slice of a deal or structured financing. This portion is one of several related securities that are offered at the same time but have different risks, rewards and/or maturities. "Tranche" is the French word for "slice". Investopedia Says:
Tranche is a term often used to describe a specific class of bonds within an offering wherein each tranche offers varying degrees of risk to the investor. For example, a CMO offering a partitioned MBS portfolio might have mortgages (tranches) that have one-year, two- year, five-year and 20-year maturities. It can also refer to segments that are offered domestically and internationally. Related Terms:
Asset-Backed Security
Collateralized Debt Obligation - CDO
Collateralized Mortgage Obligation - CMO
Commercial Mortgage Backed Securities - CMBS
Companion Bond
Mortgage
Mortgage Backed Securities - MBS
Planned Amortization Class (PAC) Tranche
Targeted Amortization Class - TAC
Z-Tranche |