tranche Definition
- 1a portion of something, especially money
- 2a division of a debt security, typically a bond or debenture, into a series of smaller parts
Using tranche: Examples
Take a moment to familiarize yourself with how "tranche" can be used in various situations through the following examples!
Example
The loan was divided into several tranches.
Example
The first tranche of the bond issue was oversubscribed.
Example
The company issued a tranche of new shares to raise capital.
tranche Synonyms and Antonyms
Phrases with tranche
the highest-priority tranche in a securitization structure, which is paid first and has the lowest risk
Example
The senior tranche of the mortgage-backed securities had the highest credit rating.
a tranche of debt or equity that falls between the senior and junior tranches in a securitization structure, with a higher risk and higher yield than the senior tranche but lower risk and lower yield than the junior tranche
Example
The mezzanine tranche of the CDO was the most profitable but also the most risky.
the lowest-priority tranche in a securitization structure, which is paid last and has the highest risk
Example
The subordinate tranche of the collateralized debt obligation had the highest yield but also the highest risk.
Origins of tranche
from French 'slice' or 'portion'
Summary: tranche in Brief
The term 'tranche' [trænʃ] refers to a portion or division of something, particularly money. It is commonly used in finance to describe a division of a debt security, such as a bond, into smaller parts. Examples include 'The loan was divided into several tranches' and 'The company issued a tranche of new shares to raise capital.' Tranches can be classified by risk level, such as the senior tranche, mezzanine tranche, and subordinate tranche.
