Tranche
The tranche ([ trã: ʃ (ə) ]; French tranche , "slice", "cuts") is part of a whole in many fields .
economy
Several disciplines use the word with different conceptual content , depending on whether money or goods are to be divided.
Banking
In the lending business, the tranche is a contractually stipulated segment of the credit risk associated with one or more risk positions in accordance with Art. 4 Paragraph 1 No. 67 CRR . Tranches are loan sections that can be accessed either on specific dates or after certain disbursement requirements have been met. For example, the Revolving Credit Facility can be used on a revolving basis in international credit transactions within a framework credit ; their tranches are temporary and can after the deadline until the maturity of the credit facility prolonged be. The term loan facility's framework credit is fully defined in terms of amount, term, interest rate and repayment. Your tranches must be used by a certain point in time, otherwise the credit line will expire. In real estate financing , payments are made in tranches in accordance with Section 3 (2) No. 2 MaBV , which are based on the construction process .
Foreign trade finance
In foreign trade finance, a revolving letter of credit provides for the use of the letter of credit in tranches that are renewed to cover the respective value of the partial deliveries.
Capital market
On the capital market , one speaks of tranches as part of an issue if this is not to be placed on the primary market immediately , but successively. This is the case with bonds , the tranches of which can sometimes consist of various foreign currencies or nominal interest rates , and with shares , if authorized capital is available.
Credit trading
In credit trading , the residual probabilities ( reciprocal value : confidence levels) can be used as a measure of the probability of a total failure to assess individual tranches .
| Tranche | Confidence level | Probability of total loss |
|---|---|---|
| first loss: equity (and subordinated loans) | 88.42% | 11.58% |
| 1st second lost: mezzanine | 98.98% | 1.02% |
| 2nd second loss: mezzanine | 99.74% | 0.26% |
| 3rd second loss: mezzanine | 99.95% | 0.05% |
| Third loss: senior debt | 100.00% | 0.00% |
The loss allocation begins with the first loss tranche , this is the equity tranche (including subordinated loans ), which bears the first losses and is therefore the most risky. It follows with the mezzanine tranche , the average risk level, while the safest stage the classic loans ( english debt senior ) represent. Different ratings can be assigned to these risk classes .
In the case of securitisations , the entire credit risk can be “tranched”, ie divided into these three risk classes. If an almost risk-free “senior tranche” is created through tranching, the problem of adverse selection is solved. In this way, entire loan portfolios can be broken down into probabilities of default that are graded according to risk classes . A collateralized debt obligation (CDO), for example, consists of tranches, each with a uniform repayment risk . If loan defaults occur, the tranches are affected at different times due to their rank. In the subprime market , there was from August 2007 to a sub-prime crisis , partly because the securitized CDOs bad US mortgage loans en masse recorded loan losses and thus a risk concentration realized the CDOs.
In the case of CDOs, the tranching meant that mezzanine and senior securities could also be sold specifically to institutional investors (especially insurers and pension funds ), who are otherwise legally prohibited from investing in risky paper. "With the help of this technology, up to 97 percent of securities were" conjured up "from a portfolio of relatively risky loans, which were classified as very safe or secure." The Advisory Council of the Federal Government for the Assessment of Overall Economic Development compared this "magic" in its 2007 annual report / 08 with a change from country wine to quality wine.
Non-banking sector
In the case of non-banks, there are tranches within the framework of long-term obligations such as beer supply contracts , framework agreements , successive supply contracts or work and services contracts . They contain economic partial deliveries, which are called tranches. Legally, it is usually not a question of partial deliveries, because the delivery obligation is fulfilled and revived with each tranche. In general, the supplier is not entitled to make partial deliveries ( § 266 BGB ), but this provision is mandatory . In the case of partial deliveries of a coherent whole (such as a whole ) or if the individual deliveries are made one after the other for technical reasons relating to shipping , the delivery is effected when the last partial delivery is received.
culinary arts
In Germany, Austria and Switzerland, carving is understood in the art of cooking as the correct and skillful cutting of meat , fish and poultry , but also of fruit and vegetables , the result is the tranche or slice.
Web links
Individual evidence
- ↑ the repayment in a lump sum on the maturity date ( English bullet-repayment ) is possible
- ^ Karlheinz Tannert, Lexikon der Wirtschaft: Finances , 1986, p. 124
- ↑ Cordula Emse, securitization transactions of German credit institutions , 2005, p. 268 f.
- ↑ Marcus Sidki, Asset-Backed Securities , 2013, p. 143
- ↑ Johannes Wernz, Bank Control and Risk Management , 2012, p. 124
- ↑ Hanno Beck / Helmut Wienert, Anatomy of the Great Depression : Causes and Guilty , in: APuZ. From politics and contemporary history. bbb: 20/2009. May 11, 2009 , publisher: Federal Agency for Civic Education, supplement to the weekly newspaper Das Parlament , Bonn, p. 9
- ↑ Hanno Beck / Helmut Wienert, Anatomy of the Great Depression : Causes and Guilty , in: APuZ. From politics and contemporary history. bbb: 20/2009. May 11, 2009 , publisher: Federal Agency for Civic Education, supplement to the weekly newspaper Das Parlament , Bonn, p. 9
- ↑ Council of Experts for the Assessment of Overall Economic Development, Annual Report 2007/08, Don't gamble away what you have achieved , Wiesbaden, 2007, p. 112.
- ↑ Claus-Wilhelm Canaris / Peter Ulmer (Hrsg.) / Dieter Brüggemann, Commercial Code: Großkommentar , Volume 4, 2004, § 377 Rn. 40, p. 21
- ↑ Kathrin Beyer / Andrea Rudminat / Annette Beuckmann-Wübbels / Corinna Hoppe, Deutsche Küche , 2008, p. 24
