Equity Tranche
Equity

The equity tranche is the riskiest and potentially highest yielding tranche of a structured security or company's capital structure

More About Equity Tranche

  • The riskiest part of the capital structure
  • Absorbs losses first
  • Typically does not offer a fixed return - captures all excess gains/cashflow after more senior tranches are paid
  • Is the most risky tranche, but also has the highest potential rewards