A more thorough explanation:

Definition: Tranche (transh), n. [French “slice”] Securities. A bond issue derived from a pooling of similar debt obligations. A tranche usually differs from other issues by maturity date or rate of return. It can also refer to a block of bonds designated for sale in a foreign country.

Example: A company issues a bond for $100 million. The bond is divided into three tranches: tranche A, tranche B, and tranche C. Each tranche has a different interest rate and maturity date. Tranche A has the lowest interest rate but the shortest maturity date, while tranche C has the highest interest rate but the longest maturity date. Investors can choose which tranche to invest in based on their investment goals and risk tolerance.

Explanation: Tranches are used to divide a bond issue into smaller, more manageable pieces. Each tranche has its own characteristics, such as interest rate and maturity date, which can appeal to different types of investors. By offering multiple tranches, issuers can attract a wider range of investors and better manage their debt obligations.