Senior Tranche

Glossary

Banking

Senior Tranche

A senior tranche relates to the senior debt tranche (slice) of debt issued by securitisation (cf.) and other structured credit vehicles such as collateralised debt obligations. These vehicles typically issue a series of tranches with different risk profiles. Senior tranches sit at the top of the capital structure, meaning holders are paid first from cash flows from underlying receivables, ahead of subordinated (mezzanine and junior) tranches.

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