Tranche

A tranche (pronounced 'trazh') refers to a portion, installment, or slice of something, especially money, goods, or assets, that is offered or released at a specific time. It is frequently employed in financial contexts, such as in bond offerings, loan disbursements, and securities, where a total sum is broken down into multiple parts to be released or sold in phases. The purpose of using tranches is to manage risk, control cash flow, and offer flexibility to both providers and recipients.

Tranche meaning with examples

• The company secured a loan, with the funds being released in several tranches based on the achievement of certain project milestones. This phased approach allowed the lenders to monitor progress and mitigate potential risks associated with the investment.
• The government offered a new bond issue, with the initial tranche being heavily oversubscribed. This strong demand indicated investor confidence and allowed the government to raise significant capital to fund its infrastructure projects in the future.
• During the restructuring, the bank decided to sell its assets in several tranches to maximize returns and minimize disruptions to the market. The early tranches sold quickly because they were of high quality and attracted institutional buyers.
• The venture capital firm committed to a seed round investment, intending to provide further capital in subsequent tranches based on the startup's performance and achievements in their market goals.