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Tranche

In securitization, a tranche is one of several related securities offered as a part of the same transaction but pay different interest rates, mature on different dates, or carry different levels of risk. The different investment characteristics of each tranche allow the investor flexibility in choosing a combination of tranches to produce yield, cash flow, and safety within a securitized bond.

From BusinessDictionary.com :

“A single bond, such as collateralized mortgage obligation (CMO) may be issued with several tranches, each with its own priority of principal repayment and own CUSIP number. A typical CMO, for example, has four tranches: 'A' (fast pay), 'B' (medium pay), 'C' (slow pay), and 'Z' (no coupon but receives cash flow from the collateral remaining after the previous three tranches have been satisfied). As one trance matures the next consecutive tranche takes its place.”