companion tranche

companion tranche
A specific tier or segment of REMIC security. A REMIC tranche that is structured to absorb a disproportionate amount of the volatility caused by variations in the prepayments of the underlying collateral. Companion tranches are created to be more volatile so that other tranches in the same REMIC, called PAC or TAC tranches, may have more stable cash flows. Hence the name companion.
Also called support tranches. American Banker Glossary

Financial and business terms. 2012.

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  • Companion Tranche — A class of tranche found in planned amortization class (PAC) and targeted amortization class (TAC) collateralized mortgage obligations (CMOs) that absorbs variable prepayment rates. The companion trache is so named because it is designed to… …   Investment dictionary

  • Companion Bond — A class of tranche found in a planned amortization class (PAC) bond that is responsible for protecting the PAC tranche from both contraction and extension risk. The companion bond is designed to absorb excess principal payments during times of… …   Investment dictionary

  • support tranche — See companion tranche …   Financial and business terms

  • PAC tranche — planned amortization class ( PAC) tranche A REMIC security created to receive selected cash flows from a pool of underlying mortgages securing the REMIC. PAC tranches use a structure similar to a sinking fund to establish a fixed principal… …   Financial and business terms

  • planned amortization class tranche — planned amortization class ( PAC) tranche A REMIC security created to receive selected cash flows from a pool of underlying mortgages securing the REMIC. PAC tranches use a structure similar to a sinking fund to establish a fixed principal… …   Financial and business terms

  • Planned Amortization Class (PAC) Tranche — A class of tranche in a planned amortization class (PAC) bond that receives a primary payment schedule. As long as the actual prepayment rate is between a designated range of prepayment speeds, the life of the PAC tranche will remain relatively… …   Investment dictionary

  • Super PO — A companion tranche structured as a Principal Only (PO) bond, which receives only principal payments from the underlying mortgages. A Super PO is designed to lend support to planned amortization class (PAC) and targeted amortization class (TAC)… …   Investment dictionary

  • support tranches — See companion tranche …   Financial and business terms

  • Les Bronte — Les Brontë Anne, Emily et Charlotte Brontë, par leur frère Branwell (vers 1834). Lui même s était représenté, au milieu de ses sœurs, avant de s effacer, pour ne pas surcharger le tableau. Les Brontë sont une famille littéraire anglaise du… …   Wikipédia en Français

  • Les Brontë — Anne, Emily et Charlotte Brontë, par leur frère Branwell (vers 1834). Lui même s était représenté, au milieu de ses sœurs, avant de s effacer, pour ne pas surcharger le tableau. Les Brontë sont une famille littéraire anglaise du XIXe siècle …   Wikipédia en Français

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