|
Tranche
|
One of a related series of security issues-each with different cash flows, strike prices, expiration dates, and/or return patterns-created to meet differing investor or issuer requirements or to carve up the returns from a set of underlying cash flows in a marketable way. Mortgage-backed securities, equity- linked notes, and range warrants are often created in tranches. For example, see Collateralized Bond Obligation (CBO). See also Principal Only (PO) Obligation, Real Estate Mortgage Investment Conduit (REMIC), Interest Only (IO) Obligation.
|
