definition tranche
Noun[edit] tranche â(plural tranches) 1  A slice, section or portion. ( finance) One of a set of classes or risk maturities which compose a multiple-class security, such as a CMO or REMIC; a class of bonds; collateralized mortgage obligations are structured with several tranches of bonds that have various maturities.
A tranche is a piece or a part of something, usually money. An installment of a loan is a tranche. The noun tranche comes from the French word trancher, to cut, which should help you remember that a tranche is a portion of something, not the whole thing. Usually, it's part of a larger sum of money, like a mortgage payment, half of a bonus payment, or an installment of lottery winnings. People who work in banking and finance use tranche to mean one bond or security within a larger financial deal. Definitions of tranche.