Tranches
Tranche is a term used to describe a portion or slice of a larger financial arrangement, asset pool, or program. The word comes from French tranche, meaning a slice, and is used to identify segments that have different rights, risk profiles, or timing of payments.
In securitization, a pool of assets such as mortgages or loans is financed by issuing several tranches
Tranches are also used in lending facilities and project finance to tailor funding to different stages or
Important considerations include the fact that tranche structures can affect liquidity, valuation, and regulatory capital treatment.