Tranche

1. A portion of a loan, loan commitment or security issue that is characterized by different financial terms. Each tranche might have a different maturity date, interest rate and prepayment requirements.
2. For example, a term loan might be divided into different maturities. A tranche A term loan would typically have an earlier maturity and bear a lower interest rate than a tranche B term loan. A loan is divided into different tranches and given different economic characteristics to facilitate syndication to different kinds of buyers.

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