Tranches

tranches are also called "bonds","notes", usually it represents the liability side of deal. A deal usually has multiple tranches with different priorities in terms of cashflow distribution at each payment date.

in clojucture ,there are couple type of tranches:

• pass-through, is the most normal tranches that get paid by the most available of cash
• schedule-bond, which is quite like TAC, it only absorb principal with caps.
• equity-bond, which doesn't have coupon but only principal, thus no interest cashflow for this kind of bond
• z-bond , before other tranches paid off, it will be negative amortize balance by the amount of interest accrued.