TRANCHE

Tranche

In structured finance, a tranche, sometimes misspelled as traunch or traunche, is one of a number of related securities offered as part of the same transaction. The word tranche is French for slice, section, series, or portion, and is cognate to English trench . In the financial sense of the word, each bond is a different slice of the deal's risk. Transaction documentation usually defines the tranches as different "classes" of notes, each identified by letter with different bond credit ratings .

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tranche

Noun

  1. A slice, section or portion.
  2. One of a set of classes or risk maturities which comprise a multiple-class security, such as a CMO or REMIC; a class of bonds; collateralized mortgage obligations are structured with several tranches of bonds that have various maturities.


The above text is a snippet from Wiktionary: tranche
and as such is available under the Creative Commons Attribution/Share-Alike License.

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