A segment or tier within a loan or security.
Also known as a class.
For example, collateralized mortgage obligations (CMOs) are securities for which the cash flows are segregated into tranches and sold separately. Each tranche is a separate security with its own maturity date and interest rate. CMOs may have over a hundred tranches or classes. Tranche is the French word for slice. Tranches are used to reallocate principal and interest cash flows so that some classes have lower risk while some have higher risk.
See waterfall. American Banker Glossary
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One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. Bloomberg Financial Dictionary
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part of a larger sum of money or collection of shares:
• The government has traded 200 million Eurobonds in two tranches.
• The second tranche of the loan would be repaid over three years.
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French word for a slice. Used widely to mean a portion, allocation or instalment.
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tranche UK US /trɑːnʃ/ noun [C] FINANCE
► one of the parts into which a particular financial arrangement, payment, investment, etc. is divided: »
The oil company will pay $2.4 billion in cash up front, with three annual tranches of $1.25 billion to come.
»They will follow up last year's initial public offering with the sale of a further tranche of shares worth up to €500m.
Financial and business terms. 2012.