The Capital Structure or Tranche Tab is located in the Capital Structure section of the platform. Tranche types and functionality are specified within this tab. The mandatory fields are Name, Type, Balance ($), Coupon (%), and a Settlement Date.  

Tranche Types Overview

  • P&I: A tranche that has both Principal and Interest, the user will need to fill out the Tranche’s balance, Coupon Rate, and Settlement Date. The user can also define IO Tranches that are related to this Tranche. This tranche type also allows for another account which can be used as a source from the waterfall to draw from.
  • P&I Pass-Through / P&I Pass-Through Interest / IO Pass-Through Interest: A Pass-Through Tranche has no obligations, yet the user can use this Tranche to simply pass funds to the investors. This tranche type also allows for another account which can be used as a source from the waterfall to draw from.
  • IO: IO is an Interest Only Tranche, that must be related to a P&I Tranche in order to inherit its balance. This Tranche only pays interest that is calculated based on the related P&I Tranche. The user can define the related Tranche in the drop-down menu.
  • Residual: A Residual tranche, holds no payment obligation, and can be used in the Digital Waterfall.
  • Notional IO / Notional IO Pass-Through Interest: Once choosing Notional IO / Notional IO Pass-Through Interest the following will accrue:
    1. New beginning & ending balance will be available for calculations with dynamic expression
    2. Original balance will be available but no longer mandatory.
  • Custom: This tranche type allows for flexibility of ongoing interest and balance updates. The mandatory fields are Beginning Balance and Beginning Interest Due which can be dynamic expressions. The optional field is Beginning Interest Shortfall Due. This tranche type also allows for another account which can be used as a source from the waterfall to draw from.
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Tranche Functionality

The Capital Structure table will open by default with two empty P&I tranches.

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Adding a New Line

The table will automatically add an extra line each time the user defines a new Tranche, meaning there will always be an empty line below.

The user can also add or delete a line by right-clicking on the Tranche numbering. 

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Change Types of Tranche

The user can change the type of the Tranche to the Pass-Through parallel within the same category - meaning, the user can change P&I to P&I pass through.

 

Re-Ordering the Tranche Structure

The user can drag and drop any Tranche to any place in the structure easily. This will not affect the payment order, yet is meant to supply a visual aid for the user.

 

Waterfall

All Tranches defined will be available to use in the Waterfall.

 

 

See further details about Tranche Terms here.