tranches

(noun)

One of a number of related securities offered as part of the same transaction.

Related Terms

Examples of tranches in the following topics:

  • Securitization and the 2008 Financial Crisis

    • Securitization is more complex because a fund could issue different bonds called tranches.
    • A tranche is a French term meaning a portion or slice.
    • Each tranche has a bond associated with a risk level and a different credit rating.
    • Li's method allows easy and quick pricing of these tranches.
    • The bankers created CDOs with tranches to offer different returns and risk levels to investors.

  • Other Types of Bonds

    • The latter are often issued in tranches.
    • The senior tranches get paid back first, the subordinated tranches later.

  • Answers to Chapter 10 Questions

    • A fund offers different tranches with different credit ratings and rates of return.

  • Types of Private Financing Deals: Going Private and Leveraged Buyouts

    • Depending on the size and purchase price of the acquisition, the debt is provided in different tranches: