Jesse McKinley writes for the NY Times (archived) about a word that is apparently showing up all over the place:
With roots in the Renaissance and a long history of use by economists, tranche has been given new prominence in recent weeks as writers and pundits seek to describe the some three million pages released by the Justice Department in relation to Jeffrey Epstein, the deceased sex offender and financier.
In the month since the Jan. 30 release, there have been tranches heard on the radio, on television, online and in print. There have been descriptions of “massive” and “enormous” tranches, “giant” and “voluminous” tranches, and — conversely — “small” tranches inside big tranches. There have been “recent” tranches and “new” tranches and “possibly last” tranches. There have been Spanish-language tranches (“tramo,” roughly) and, of course, French tranches, a natural outgrowth of its ancestry as a French verb, trancher, meaning to slice.
In English, tranche has made the leap from verb to noun, and is generally defined as a portion of a larger whole. […]
Deborah Tannen, a professor of linguistics at Georgetown University, said that the word’s current prominence was reflective of a phenomenon known as “lexical touch-off,” which she credited to the sociologist Harvey Sacks. That theory holds that when people hear a word in a conversation — including an unusual or unexpected word — they then find themselves repeating it. Dr. Tannen also noted that tranche’s use may be fueled by “verbal inflation,” whereby the meaning of a word expands beyond its initial definition, often diluting its impact.
The term “tranche de vie,” or “slice of life,” has long referred to an artistic form known to represent everyday existence. The word has also long been common in the world of finance, and it got some major big-screen exposure in the 2015 movie “The Big Short,” based on the Michael Lewis best seller. That film was peppered with tranches, including in a crucial early scene where a trader played by Ryan Gosling explains why mortgage-backed securities — and the housing market — are likely to implode. (Spoiler: They did.)
Google shows that the word initially began gaining popularity in books in the 1960s, peaking in the mid-1990s and again around 2008 (around the aforementioned collapse of the housing market). The word also appears hundreds of times in the Epstein files themselves, which is not surprising considering Mr. Epstein worked in finance for decades.
Kory Stamper, a lexicographer and author of “Word by Word: The Secret Life of Dictionaries,” said that use of the word tranche was accelerated by the Covid pandemic and the associated financial measures. “‘Tranche’ got used a ton to refer to reserves of vaccines,” she said, noting its use started to decline in 2024 “when most pandemic measures wound down.”
This latest round is not tranche’s first brush with fame. In 2009, the New York Times columnist William Safire identified it as “the hot word in the lexicon of this year’s unprecedented budget stimulus,” which may well have been the only time that phrase has ever been written. Mr. Safire, a onetime political speechwriter and “oracle of language” who died in 2009, also noted its relation to the word “trench,” and predicted a batch of puns involving “tranche warfare.”
Anne Curzan, a professor of English and linguistics at the University of Michigan, said some people fluent in financial jargon were now using tranche as both a noun and a verb: to tranche, meaning to distribute something in tranches, taking the word back to its Gallic-verb days. […]
Adam Aleksic, an author and linguist who posts as the Etymology Nerd on social media, predicted that the continued digging into the Epstein files meant that “we’re probably going to see more of tranche,” adding that many people love a French term, what with the way it makes you sound super-sophisticated and stuff. “We like Latin words more than Germanic words for sounding pretentious,” he said, adding that tranche “sounds more institutionally prestigious.”
“It sounds,” he added, “like you know what you’re talking about.”
The OED only takes it back to French trancher ‘to cut,’ but Wiktionary suggests that’s “possibly from Vulgar Latin *trinicāre (‘cut in three parts’).” I’m not sure I’ve ever had occasion to use the word tranche, but I have nothing against its (presumably temporary) popularity; I just wish the NYT would italicize words used as examples, which would make such discussions clearer. Oh, and cuchuflete, who sent me the article, says “Interesting that the article omits the IT synonym, ‘batch’.” Gracias, pibe!
El placer es todo mío, Che.
Reading the Times article I had two reactions within the sordid confines of my own head. The first was noted above—in the early days of mainframes in commercial use, most jobs were batch processed. A batch, or bunch, or tranche of jobs were run together, rather than individually in “real time”.
The other thoughts were along the lines of, “What’s the big deal? Tranche has been common since Hector was a pup.”. Reflecting a bit more, I remembered tranche in the context of the MBA program at Wharton in the 1970s. The finance types loved them those quaint buzzwords, and tranche was among them.
“ When he started at Bear Stearns, his team had two people. That number has quintupled because trading volume has increased so rapidly; Nierenberg’s team often trades in one day more than $1 billion of mortgages packaged into bonds. His team buys mortgages from such issuers as Fannie Mae and Freddie Mac. One trade in December involved buying $1.3 billion in mortgages and then carving them up into 10 tranches for resale. “
source: https://www.bauer.uh.edu/rsusmel/7386/bondtrading.htm
“ 1977: EEC’s first Eurodollar deal – a US$500m two-tranche issue
The European Economic Community’s first Eurodollar issue – a US$500m deal divided into a US$200m five-year and a US$300m seven-year – was a vital step in establishing the legitimacy of the Eurodollar market.”
source: https://www.ifre.com/ifr-reports/35702/the-deals-1974-to-1983
I feel like this is a jargon word I’ve known quite well for a long time and I couldn’t immediately tell you whether that’s one decade, two decades, or three. A quick check of a court-opinions database suggests that it may have indeed become ubiquitous and inescapable in circles I move in as, consistent with the story told in some of those block quotes, part of the aftermath of the 2008 financial crisis and the litigation-generating blowups of securitized-mortgage investment vehicles. Representative quotation: “The highest tranche (also referred to as the senior tranche) is first to receive its share of the mortgage proceeds and is also the last to absorb any losses should borrowers become delinquent or default on their mortgage. Of course, since the investment quality and risk of the higher tranches is affected by the cushion afforded by the lower tranches, diminished cash flow to the lower tranches results in impaired value of the higher tranches.” Although I worked intermittently on enough bankruptcy-related matters before that that it wouldn’t surprise me if I’d heard it in similar contexts already, and presumably the people putting together deals that didn’t blow up or at least hadn’t yet blown up (so I had not had occasion to learn anything about them) had been using the terminology already for a while.
Indeed you can find the word in court decisions from the end of the last century arising out of the 1994 collapse of David Askin’s investment empire, which some of my then-colleagues were involved with although I forget the details and who our firm represented with respect to which facet(s) of the mess. Maybe only a mere $600 million was lost but in the context of 2008 et seq. that one was sometimes recalled as an early cautionary tale whose various lessons perhaps had not been heeded as well as they should have been.
I must have encountered it sporadically before 2008, but it was the mortgage crisis that converted tranche into word that felt commonplace, rather than a piece or jargon.
The google books ngram viewer shows usage starting to shoot up in the very late 1950’s. Some hits from around then seem heavily focused on sovereign bonds and/or the accounts of various governments with the International Monetary Fund.
As someone who studied economics and whose work involves finance, I am one of those who don’t remember a time when the word wasn’t around and are surprised that there are well-educated people who didn’t encounter the word before. Surely everyone must know such a basic concept….
(It also seems much more common in German; plus, dismembering a roasted chicken is tranchieren.)
The same here, and I didn’t study economics.
For some reason Hans’ & ulr’s comments perhaps perversely remind me of:
“And even I can remember
A day when the historians left blanks in their writings,
I mean, for things they didn’t know,
But that time seems to be passing.”
LOL this was me writing a note about tranches surprisingly relevant to this thread back in the days after the financial crisis of 2007-08.
https://talkingpointsmemo.com/edblog/the-good-old-days-3
what Brett said!
i’m not sure i’ve ever heard it used as a verb in the wild; i’m very certain i’ve never heard “tranche de vie” in an english context.
generally defined as a portion of a larger whole.
this, though, i want to quibble with (as well as deborah tannen’s seemingly related comment). it may be “defined” that way by some, but i’ve never encountered it used without the specific meaning of one of a set of hierarchically ordered segments of a whole (even if the hierarchy is just temporal, as in the case of the various released batches of epstein files).
i’ve never encountered it used without the specific meaning of one of a set of hierarchically ordered segments of a whole
My experience has included segments with no hierarchical order. See the Bear Stearns quote above. “ One trade in December involved buying $1.3 billion in mortgages and then carving them up into 10 tranches for resale. ”. In financial contexts the tranches may be traded simultaneously, so even temporal hierarchies don’t exist. The tranches are akin to slices of a pie.
They are simply divisions.
LOL this was me writing a note about tranches surprisingly relevant to this thread back in the days after the financial crisis of 2007-08.
And thus I learn about Ograbme.
The word ‘tranche’ gained some popularity among politics-following public in 1990s Russia when government depended for its funding on aforementioned IMF. Because the government didn’t want to follow all of IMFs conditions there was always back-and-forth about what they will and won’t do to get another “tranche”. I still think it was better than what followed.
@cuchuflete: my understanding (people here with actual knowledge, please correct me if i’m mistaken!) is that exactly those kinds of “tranches” of bundled assets (here, mortgages) are assembled on the basis of their riskiness as investments, with a given tranch containing mortgages of a similar likelihood of default – which is to say that they are hierarchically constructed to establish their market value. that’s very much the 2008-09 usage that is my main reference point for the word: phrases like “the highest-risk tranches”.
@rozele- I see how you are using hierarchical and that’s a fair way to look at it. However, in the Bear Stearns example noted above there is no reference to other undivided or separated segments. There is a single $1.3 billion collection that is sub-divided.
Of course the pricing of the tranches—or any other security offered for sale—is based on a combination of perceived risk, expected returns, market demand, and alternative investment options, so one could establish a hierarchy. But that is a bit of a stretch in this particular case. Per Occam’s razor it is simply a whole divided into equal parts.
in some plane of platonic abstraction, that may be true. but in the world we live in, the reason for the division in these cases is precisely (if not exclusively) to establish a hierarchy of (alleged) risk, separating purportedly “safer” sets of mortgage derivatives (etcetera) from “more risky” ones. absent that kind of hierarchical division, there would be no need to divide the larger pool – otherwise, shares (or whatever the terms of art are for placing bets on the possibility of profit in these cases) in the undivided lot would simply be offered without the additional complexity.
that is so central to the premise of these kinds of scams (“investments”, to the marks) that it doesn’t need to be stated in a hybrid finance/lifestyle puff piece like that one. for a somewhat comprehensible technical explanation, take a look at this 2007 report on “Subprime Mortgage Problems” (more or less randomly chosen from the first page of search results for “mortgage derivative tranches”). the blue boxed section on the second page explains how these tranches are created, to establish uniformity “by principal payment priority, credit support, coupon rate, and[/or] prepayment protection.” it goes on to state quite directly that “tranche sales depend upon the dealer structuring the entity [that owns the portfolio of mortgages] so that its credit enhancement and tranche design appeal to investors” – in other words, on the differentiation of the portfolio into tranches “that vary in subordination, coupon, and stated maturity.” it goes on to remark that “most problems in subprime mortgage transactions surface first for holders of low credit quality tranches”.
You have provided a good description of a market. When power is restored later today I will venture out to buy groceries. In the produce aisle I will engage with a hierarchy. I will choose among supposedly (only Wharton professors and their ilk believe in markets driven by “perfect information”.) Canadian parsnips, supposedly Mexican avocados, rutabagas of unknown provenance—my British partner insists on calling them Swedes, and the other usual culprits.
Each has associated risks of unseen interior rot, too much time elapsed since harvest, genetic engineering that makes them as pretty as flavorless. It all boils down to a risk/reward calculation.
And then we address portion/bunch/tranche size. And let us not knowingly omit price from our decision. We weigh—no puns intended—our options and choose our victuals. Hierarchies?
Yes, of course.
We have accepted that all market decisions involve hierarchies. Every single one, outside of the not so dearly departed Soviet paradises, in which choices were pre-determined, obviating any need for evaluation of typical hierarchical factors.
It’s all trivially obvious.
Moving right along to the dark and often evil world of financial instruments, we find more of the same. Let’s take an IPO (Initial Public Offering of shares of stock in a company) in which the previously privately held firm is putting 90% of itself up for sale. That portion of the total equity
has been divided into tranches, a.k.a., shares, of which there are ten million.
Hierarchical comparisons abound! A potential buyer has tens of thousands of other places to put their capital at risk, from municipal bonds to indexed mutual funds to shares in a dietary supplement (read: ingestible fraud) marketer, as seen on TV. Some of those choices, as you have pointed out, come with greed driven misinformation.
I yield. Any and all tranches are hierarchical. As are 100.00000% of all market decisions outside of the dreary exception noted above.
@cucheflete: I tend to agree that “hierarchical” may not always be the useful word, but “tranche” carries for me a strong implicature of *some* relevant difference between the tranches of the same “whole.” It makes no sense from a pragmatics perspective, for example, to assert that all Gaul is divided into three parts unless those “parts” represent some meaningful distinction(s) even if “part” in the abstract is a sufficiently vague word that the reader doesn’t know what distinction(s) that will turn out to be without reading further. In the example where Bear Stearns carves up $1.3B (whatever that means?*) of underlying mortgage loans into 10 tranches, the mention is too cursory to figure out what the differences are (because the story isn’t really about the actual deal but rather a low-information “personality profile” of a trader), but there must be something. That said, I can certainly imagine a situation where ex ante the risk/return profile of an investment in tranche A seems identical to that of a same-sized investment in tranche B yet it is known ex ante that the ultimate returns of those investments may well differ from each other or at a minimum are not guaranteed to stay in sync.
*Face value or current secondary-market value? If they were predictably trading at par it wouldn’t be worthwhile to trade them …
@J.W.Brewer. I can think of many circumstances in which I agree with you fully, and perhaps some where we part ways. To facilitate discussion I looked up a definition in Merriam-Webster online:
a division or portion of a pool or whole
specifically : an issue of bonds derived from a pooling of like obligations (such as securitized mortgage debt) that is differentiated from other issues especially by maturity or rate of return
The key here is the differentiation. That fits with @rozele’s assertion of hierarchy.
Now let us look at another, broader set of definitions, these from dictionary.com, at one time based on the Random House Unabridged:
NOUN
Finance.
1 one part or division of a larger unit, as of an asset pool or investment.
The loan will be repaid in three tranches.
2 a group of securities that share a certain characteristic and form part of a larger offering.
The second tranche of the bond issue has a five-year maturity.
3 any part, division, or installment
#s 1 and 3 allow for undifferentiated divisions. Please note the example for the first definition.
We can assume three repayments, each of a different amount, or three identical transfers.
For any example involving securitized mortgages or similar debt instruments there is going to be differentiation at a minimum based on likelihood of default. For payments involving a car lease differentiation is unlikely.
For the undifferentiated case I sought examples by googling “four equal tranches”.
“ Amortization works by splitting an outstanding equity award into separate tranches according to the vesting schedule. For instance, a grant that vests 25% every year over a four-year period would have four equal tranches. How the expense of an award is distributed across each tranche depends on which amortization method you use: graded, straight-line, or ratable.”
source: https://carta.com/learn/startups/equity-management/share-based-payments/
Another example-
“ The deployment of this loan was structured in four equal tranches drawn in the first 1 to 6 months of the deal and converted into Brazilian Real. The repayment is a lump sum payment made for the entirety of the outstanding balance of the loan.”
source: https://www.deaglo.com/success-stories/tecredi
I tend to agree that “hierarchical” may not always be the useful word, but “tranche” carries for me a strong implicature of *some* relevant difference between the tranches of the same “whole.”
Same here. I don’t think a pizza would be divided into six tranches (except perhaps in France).
. https://content.edgar-online.com/ExternalLink/EDGAR/0001375365-21-000022.html?hash=1b3866e82d771b255e933606143e53393dcd94c91dbcc34800c436270f4e3a81&dest=exhibit102-nonqualifiedsto_htm#exhibit102-nonqualifiedsto_htm
The tranches are equal. The conditions required to earn them are variable.
A loan repayable or for that matter drawable in equal installment amounts at different dates is still differentiated, because once the first tranche is drawn-or-repaid there is still non-zero credit risk that the second tranche won’t actually be drawn-or-repaid, at least not in full and on hte pre-agreed date. Similarly, the later tranches of an equity award that vests in tranches over three years may never vest because there may be separate conditions precedent that are not satisfied even if the first tranche did vest.
The moderation queue has gobbled up another example in which the issuer of a grant described it as having ’five equal tranches’. I commented that while the tranches were identical, the required conditions of the grant were varied.
We can focus on the tranches themselves, which are described as equal, or we can say that contextual factors involving the tranches are intrinsic. It makes for a good debate.
It appears that “equal tranches” usually refers to tranches that are equal in size. However, that does not necessarily make them equivalent in character.
@Brett: it seems as simple as “if the things really were both equal in size and fully equivalent in character, why would you bother to use wording that distinguishes between them?” Obviously the distinctions may come and go – the example cuchuflete had of the loan that was initially disbursed by the borrower in multiple tranches but then ultimately due to be repaid all at the same time seems to me a situation where once the final tranche was in the hands the borrower the original differences between the tranches would lose any ongoing salience and you would be unlikely to mention them going forward.
I tend to agree that “hierarchical” may not always be the useful word, but “tranche” carries for me a strong implicature of *some* relevant difference between the tranches of the same “whole.”
Same here. I don’t think a pizza would be divided into six tranches (except perhaps in France)
Well, pizza is not a financial instrument (but maybe someone will turn it into one some day). From the usage I know, hierarchy is not a necessary implication of a tranche, although frequently one is involved. As said, quite often its just a division in time – a loan not paid out in one go, but in tranches, or an amount of identical financial instruments divided to be sold to individual groups / classes of investors.
That would make me think of segments instead of sectors of the circle. But I’m not sure, and https://fr.wikipedia.org/wiki/Pizza contains neither tranche nor pièce.
It is in various ways potentially harder these days to talk coherently about subdividing issuance(s) of securities, in terms of singular v plural, or count nouns v. mass nouns, since the downfall of old-fashioned certificated securities as a result of https://en.wikipedia.org/wiki/Dematerialization_(securities).
The conversation so far has predictably used financial instruments as examples of tranche usage. I am curious about non-financial usage, and whether and how it may differ.
Using whatever AI bot comes with Duck Duck Go, I wrote a query requesting examples outside of finance, together with URLs. Slim pickens, but here is one result.
“ What are tranches and landing points?
Tranches are groups of related initiatives that are delivered together within a program. They are usually aligned with a strategic objective, a business outcome, or a phase of the program lifecycle.
Tranches help you break down your program into manageable chunks, prioritize your initiatives, and allocate your resources.”
source: https://medium.com/agile-adapt/a-guide-to-tranches-and-landing-points-for-program-delivery-e28e7c8e8b59
“program” as used here refers to a software development effort. Without reading much more, I would speculate that a tranche is defined by one or more of (a) lines of code, (b) work product measured by programmer hours, or, most likely, (c) functionality. One or more of you who know more about this than I do—a very low threshold, can correct me.
Assuming software functionality defines a tranche, does this imply any sort of hierarchy? As the accounting professors say in reply to every question, ‘It all depends.”
Is there apt to be differentiation between tranches? For sure.
For people like me who despise so-called A I, the results of a query asking for examples and links were illuminating in a dark manner. The word tranche was absent from all examples.
I modified the query to demand verification of its presence in all linked pages presented.
Harrrrumph!
“ The current plan is to use prioritized “tranches”, where each tranche is an internally prioritized list of tasks all related to a single goal. E.g., Tranche 1 might implement the first 1/3rd of a goal (such as rolling a new feature out to all languages); Tranche 2 might completely address one complicated problem, and then Tranche 3 might by the next 1/3rd of rolling out the new feature from Tranche 1. Tranches don’t need to be the same size. Once Tranche 1 is done, Tranche 2 becomes the most important (no renumbering, just roll forward). Since the VE team has a steady flow of high-priority bug fixes, there will also be a permanent Tranche 0, and developers will not start on Tranche 1+ unless Tranche 0 is empty or otherwise fully addressed.”
source: https://www.mediawiki.org/wiki/Topic:Sjsl0uy6yf9tpwpv
@dm, hat
https://fr.wikipedia.org/wiki/Pizza_%C3%A0_la_coupe
Maybe the better pizza-by-the-tranche wiki cite is https://it.wikipedia.org/wiki/Pizza#Pizza_al_trancio_(Milano)
Pizzaschnitten, sold individually as streetfood.
Tranches everywhere! I just happened to be reading Shakespeare, Word-Coining and the OED by Charlotte Brewer (2012), and this jumped out at me: “… the same search conducted six months later (June 2011), after two further tranches of revised entries have been substituted for the original OED2 ones, yielded a lower result”.
(Personally, I think I first heard of tranches in the 2008 crisis.)
(I think I did too.)
the reason we’ve been talking about financial instruments is that they are the locus classicus (if you will) for current usage of the word “tranche” in english, which emerged during the 2008 subprime mortgage-derivative bubble collapse. and in that context, what defines one tranche as itself as opposed to other tranches is not “market forces” or arbitrary divisions – even, perhaps especially, when the tranches are the same magnitude* – but the various characteristics that the newsletter i linked to (and countless similar documents) lays out. those characteristics, in turn, are summarized for marks (“investors”) and other believers in the Invisible Hand in terms of their “riskiness” (or “risk/reward ratios” and the like). i don’t much care whether anyone wants to use “hierarchy” to describe that**, but there simply isn’t a world in which such tranches are interchangeable, or equivalent, or distinguished only by “market action”***; they are explicitly, even aggressively, created and marketed as different gambles, organized ladderwise by various measures of risk/return (just as racehorses are, whether of equal size or not, by the odds bookies offer at the start of betting – which, as with derivative prices, are subject to change over time).
.
* here, presumably, “of equal size” means “having the same total initial valuation”.
** though that is usually a fairly uncontroversial word for sets ordered according to a specific characteristic.
*** which, of course, is every bit as fictional as phlogiston, and every bit as useful as a false explanation for real phenomena.
That’s an interesting question – does a word mean what the general public associates with it, who only have encountered a special instantation of it in a limited context, or does it mean what it is understood to mean by professionals who use it on a daily basis? Especially if it is a specialist word that sometimes makes it into broader consciousness, not a generally used word that has been appropriated by a specialist field with a specialized meaning (like “set” in mathematics).
I’m not trying to be snarky here, it’s a genuine question.
If I remember, I first encountered the word “tranche” about fifteen years ago in the context of updating a technical book – it was divided into half a dozen chunks of roughly equal length, which we called tranches, and attacked one at a time.
The Swedish verb “tranchera”, meaning to dismember a bird in a culinary context or cutting up a piece of meat, I have however known at least since my teens.
That’s an interesting question – does a word mean what the general public associates with it, who only have encountered a special instantation of it in a limited context, or does it mean what it is understood to mean by professionals who use it on a daily basis?
I am the very opposite of a professional or specialist in that field — everything I know about economics I read in general-interest periodicals — but what rozele describes is exactly how I understand it, and I would suggest that there is no wider meaning that “the general public” associates with it: it is not a word in general use, and I have encountered it basically only in connection with the 2008 crisis and discussions of it.
That’s an interesting question – does a word mean what the general public associates with it, who only have encountered a special instantation of it in a limited context,… Yes.
… or does it mean what it is understood to mean by professionals who use it on a daily basis? Yes.
Those are not mutually exclusive circumstances. Many words have a commonly accepted meaning while preserving specialist definitions.
As I mentioned way upthread, I first heard tranche used in a finance context in the 1970s. It was very much limited to specialists, and was probably unknown to most other English speakers. Then the crisis of 2008 happened and the term became fairly widely known. Along the way it found its way into computer programming and project management contexts—I don’t know when—and other specialist definitions came into use.
Again, in the financial-instrument context the background question is usually what was the motivation for the architects of the deal to subdivide it into tranches in the first place, and offering different (perceived, at least) risk-reward profiles for the different tranches is in the run-up-to-2008 context the most obvious and common such motivation. Doesn’t mean there can’t be others. Although for some other motivations-for-differentiation I can think of I’m not sure if “tranche” is the usual jargon. E.g. sometimes there are multiple vehicles offered by the same promoters that all offer pathways to invest in essentially the same underlying assets, but one is tweaked to be suitable from a regulatory perspective for investors with one tax situation and another differently tweaked to be suitable for those with a different tax situation. But maybe the structural ways in which those are differentiated to achieve those goals lead to different jargon being used by those who construct and market them.
Here’s a 2022 piece with some interesting non-financial examples of the usage of “tranche” going back some decades, allegedly with Australian journalists leading the way. https://english.stackexchange.com/questions/599936/tranche-as-synonym-for-collection
@rozele: there simply isn’t a world in which such tranches are interchangeable, or equivalent, or distinguished only by “market action”***; they are explicitly, even aggressively, created and marketed as different gambles, organized ladderwise by various measures of risk/return
Thanks, I didn’t know that. (I was indeed not paying attention to the details of the subprime crash.) But are you saying there’s something wrong with the use of “tranche” for undifferentiated slices of big sets, such as those of the Epstein files? If so, I’d disagree
@everyone who first heard the word in 2008: The unsmoothed ngram result for “tranche” surprised me with a peak in the ’90s as high as the one in the next decade. Of course, that’s books, and a corresponding graph for the news media might look very different.
But are you saying there’s something wrong with the use of “tranche” for undifferentiated slices of big sets, such as those of the Epstein files?
I won’t speak for rozele, but my answer would be: no, there’s nothing wrong with any usage that’s established in a given field or community, but insofar as there is a “general” understanding of the word it is exactly what rozele says, “explicitly, even aggressively, created and marketed as different gambles, organized ladderwise by various measures of risk/return.” I never had any sense that it could be used for undifferentiated slices; obviously it is so used in some circles, judging by comments here, but I would call that specialized usage.
Further to J.W.B.’s Stack Exchange link, here are some other non-finance uses.
Query: Is the word “tranche” widely used in computer programming contexts? If it is, please provide links to examples.
Result:BEWARE! This is AI generated.
Yes, the word “tranche” is used in computer programming and software engineering contexts, although it is not as ubiquitous as terms like “batch” or “set.” It is primarily used to describe a portion, segment, or installment of data, testing cases, or development deliverables that are processed or released in stages.
Common Usage Contexts in Tech
Software Testing & Data Processing: To describe a specific subset of data or test cases (e.g., “the first tranche of testing data”).
Project Management (Agile): To represent a “project increment” or “delivery phase” of a larger, long-term project.
Fintech & Blockchain: Used in blockchain protocols or applications managing structured debt or vesting schedules.
Data Archiving: Used specifically in systems that manage large datasets, such as the Tranche storage system for proteomics.
Examples of “Tranche” in Technical Contexts
Software/Testing Data: Used in an English Language & Usage Stack Exchange discussion, an example shows: “Five articles from the first tranche of testing were above the acceptable limit”.
Vesting Schedules: Described in a Medium article about building algorithms for equity, where vesting occurs “tranche by tranche,” such as 25%, 50%, etc..
Data Architecture: Referenced in a discussion about software engineering as a “third tranche of data – often referred to… as glue – which actually links the two grammars together”.
Distributed Storage: ResearchGate discusses “Tranche,” a distributed repository designed to store and disseminate data sets for the proteomics community.
Fintech/DeFi: “Tranche brings the concept of debt seniority to decentralized finance… creating a low-risk fixed-rate asset (Tranche A)”.
tratt.net
tratt.net
+4
“Tranche” vs. “Batch”
While often used synonymously with “batch,” tranche frequently implies a more structured or planned release of a portion of a larger whole.
Would you like to explore how to implement a “tranche” structure in a specific programming language like Python or JavaScript?
A general-purpose algorithm for building vesting schedules – Medium
May 13, 2021 — The hydration algorithm. When hydrating a vesting template, we keep a running total of the cumulative percentage vested, tranche by tranche. For example, after …
Medium
Tranche Distributed Repository and ProteomeCommons.org – ResearchGate
Abstract. Tranche is a distributed repository designed to redundantly store and disseminate data sets for the proteomics community. It has several important fea…
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insofar as there is a “general” understanding of the word it is exactly what rozele says — I am not part of this general understanding: this discussion is the first time I learn that “tranche” has a specialised technical meaning in finance. I knew the word from French. Perhaps I first heard it used in English in reportage of the 2007–9 unpleasantness, but if so I did not notice that it was being used technically as opposed to metaphorically (the way “cohort” transferred from soldiers to age groups, say). I consider “tranche” to be a synonym of “batch”, differing by (a) application to documents or virtual intellectual products as opposed to physical objects like, say, loaves of bread; and/or (b) requiring a degree of differentiation and conscious selection of the elements of the tranche, as opposed to just grabbing the first n items to make a batch. I suspect most people too young to remember 2007 share my bleached meaning.
I knew the word from French.
That might be problematic in terms of your being a representative example of English-language understanding.
I initially heard the word “tranche” with regards to the IMF’s involvement in Bulgaria’s monetary policy in the few years before and after the adoption of the currency board in 1997 (which fixed the Lev to the Deutsche Mark, after the 1996 hyperinflation crisis), which subsequently lead to the adoption of the Euro this year.
That might be problematic in terms of your being a representative example of English-language understanding.—Oh I quite agree; but by the same token I suggest the average Hatter knows considerably more about finance than the average anglophone, even if gleaned only from general news sources.
Very true, and of course none of us can actually know what the general understanding of the word is, insofar as such a thing might exist. But it’s fun to discuss!
hydrating a vesting template
To think that people used to expend effort or resort to tricks to write surrealistic poetry.
I went to the page where they’re selling that software, but the closest I saw to a definition of “hydrate” is
By the way, the tranches described there are just wads of shares in the employer’s stock. I don’t see any differentiation. (I’ll be back later to argue about the meaning of “tranche”.)
In search of further enlightenment, I went to Wikipedia.
I guess the image is that hydration is the step that turns the freeze-dried product into something useful.
I guess the image is that hydration is the step that turns the freeze-dried product into something useful.
Aww, shucks, Mister Developer, yer soffwares all wet. Mebbe iffin we put er in the sun fer a spell she’ll dry ’nuff ta run on that ol 8088.
PS- I really like your tranche synonym. Wad!
Yes, “wad” is great.
@Jerry F.: again, the tranches in the equity-grant-with-vesting-schedule situation are meaningfully differentiated from each other even if the stock contained in each tranche does not differ, qua stock, from that contained in the other tranches. They differ both in timing (which itself may be relevant to the tax implications both for employer and employee) and in the conditions determining whether the employee will ever get the stock — the usual situation is that it if you stop being employed by that employer partway through the vesting schedule (subject to possible asterisks and fine print about exactly why you’re no longer employed there) you lose any right to the still-unvested tranche(s) while keeping all your rights to the already-vested tranche(s) – that’s usually the whole point. This is differentiation with respect to different characteristics of the tranches than those in the securitized-subprime-mortgages situation, but I’m not sure if it’s really a less core use of “tranche” to describe the “wads” thus differentiated.
Imagine, I suppose, a parent slicing up a pizza and telling the child this is the slice they can have now, but this other one is the slice they can only have after they complete such-and-such chore, and then this third one in turn will only be available for eating after some further future condition is satisfied … (Maybe not the best example if you think pizza undergoes qualitative changes the longer it’s been out of the oven …)
The differentiation between tranches in the “chunk of a multi-stage production of documents in connection with a lawsuit, investigation or scandal” sense is maybe not even as strong as this, at least if the what documents are in which tranche seems largely random rather than the result of some agreed or understandable prioritization in the search and review process.
@J.W.B., We are back to the somewhat philosophical question I raised earlier,
and didn’t attempt to answer: Is a tranche simply what it, or its owner or creator says it is, or is it that plus all the circumstances that dictate whether, when, and how it is to be exercised?
The Spanish philosopher Ortega y Gasset is known for the saying, “Yo soy yo y mi circunstancia” that implies that an entity includes its context. In the world of municipal bonds and executive stock options, and those dreadful and sometimes fraudulent mortgage backed derivatives, it’s easy to assert that tranche must include conditional factors. But what of batches, bunches and wads of software project deliverables? Is a schedule date inherent to the content?
I have strong doubts in the latter case. And someone—I believe it may have been yourself—suggested earlier that such contextual factors become irrelevant once the entire series of scheduled events is complete.
Example: Three tranches of code are to be delivered from developers to system test. Each tranche of programming contains one third of program functions. The deliverable dates are April 7, June 21. and November 17. All tranches are delivered in accord with program schedule and contain pre-defined features. Other than for bug ID and fix tracking up to “go live” hand off, the dates cease to be meaningful parts of each tranche description.
@cuchuflete: Well, what if anything differentiates batches, bunches and wads (of the same larger whatever) from each other? It’s gotta be something that’s thought at least modestly salient in context or people wouldn’t talk of them, right? In the software-deliverables context, some of the examples suggest a “hierarchy” of perceived relative urgency/priority, which is a perfectly sensible way of sorting tasks into bunches or wads in a context where you always have more tasks you could potentially be doing this day-or-week than you have time to do this day-or-week.
@J.W.B., Sure, but we are addressing two different topics. I was probing the definition of tranches as potentially including contextual factors, conditions. That seems to work in finance, but not necessarily in other arenas.
The matter of hierarchy in the definition of a tranche is separate. It may very well dictate what is within a tranche, but is that intrinsic or contextual? Let’s take a software development project.
Batch/tranche #1 contains a database and APIs that allow it to be populated with data from, say, a CRM program. It is a foundational building block for the rest of the program.
Of course it has the highest initial priority. Once built and debugged, it has no particular priority in the project. It is now an existing pre-condition for whatever steps and deliverables come next.
In program management priorities change with project trajectories. None of this contradicts anything you wrote. I agree with you.
I continue to question whether context informs non-financial tranches, or is inherent to tranche definitions. In other words, Tranche/wad A1 is defined to include twelve jars of Skippy’s All Natural Peanut Butter, Extra Crunchy. It is to be delivered to the local food bank next Tuesday IF the organizers will have succeeded in acquiring two dozen loaves of bread for distribution. Is that just context? Is it part of the definition of A1?
If it is, does it get excised from the definition after delivery?
Let’s suppise there are 11 more identical tranches, one per month. Context differentiators, if you will, also include dates as well as deliverable conditions.
If dates and/or conditions are part of tranche definitions prior to delivery, do they drop out post delivery?
Once the jars of peanut butter are in your food bank’s inventory you probably want to sort unopened peanut butter inventory into “tranches” or something based on differences in expiration (or “best-by”) date and try to pass out the most-aged inventory the soonest. Maybe those aging-product tranches will correspond perfectly to the different delivery-date tranches, maybe they won’t. If the prior tranche of peanut butter is all gone from inventory (because already consumed or distributed to patrons to take with them) before the new tranche arrives, there is no need to organize inventory by tranche at all.
Even if you don’t use the word “tranche” it’s not unusual for a given store-or-equivalent’s inventory to have various superficially-identical items in it that originally arrived from the relevant supplier in different “batches” or “shipments” or “installments” or whatever you may want to label them. Sometimes it still makes sense to sort or at least track them on that basis after they’re in inventory, sometimes it doesn’t.
@Hat: insofar as there is a “general” understanding of the word it is exactly what rozele says, “explicitly, even aggressively, created and marketed as different gambles, organized ladderwise by various measures of risk/return.” I never had any sense that it could be used for undifferentiated slices; obviously it is so used in some circles, judging by comments here, but I would call that specialized usage.
As I understand what you and others have said, that widespread understanding came from news coverage of a particular event, namely the subprime bust, and applies to the people who were paying enough attention to know the attributes of the tranches that figured in it and some but not all of the people who picked the word up without knowing those attributes. Just recently “tranche” has had another ubiquitous moment in the news as the OP article says, and those tranches don’t seem to have been organized based on any particular distinction. I’d say that new coverage is at least as important to current widespread understanding of the word as the earlier coverage—more important to people who learned it c. 2008 and think of that as the core definition, less for people who are more influenced by Tranche Scare II, including, as mollymooly says, a lot of young people. So I suggest that the widespread meaning has changed, and that it could change again.
@J.W.B.: again, the tranches in the equity-grant-with-vesting-schedule situation are meaningfully differentiated from each other even if the stock contained in each tranche does not differ, qua stock, from that contained in the other tranches. They differ both in timing (which itself may be relevant to the tax implications both for employer and employee) and in the conditions determining whether the employee will ever get the stock — the usual situation is that it if you stop being employed by that employer partway through the vesting schedule (subject to possible asterisks and fine print about exactly why you’re no longer employed there) you lose any right to the still-unvested tranche(s) while keeping all your rights to the already-vested tranche(s) – that’s usually the whole point. This is differentiation with respect to different characteristics of the tranches than those in the securitized-subprime-mortgages situation, but I’m not sure if it’s really a less core use of “tranche” to describe the “wads” thus differentiated.
I don’t know what the “core” use of “tranche” is at this point, but the distinction between tranches of securities according to billed risks and potential rewards strikes me as very different from the distinction between tranches of fungible stock handed out at different times. Yes, I’m making a distinction between distinctions. I understand that having something now is different from having it three months from now, and the two tranches probably have different values per share in the company’s accounting when the first is given out, but that doesn’t make what they consist of different.
This is as close as I can get to an analogy: If someone accepts payment in kind, they typically get things that are different from each other: one hen, two ducks, three squawking geese, a car that goes nicely uphill if you push it, or whatever. If someone accepts payment in specie, they get fungible things. If they accept payment in specie in installments, we don’t call that payment in kind, even if it changes from coins to bills to bits or the value of the money changes due to inflation. The fact that the times are different, even if it affects salient qualities of the payment, doesn’t require a different word.
@cuchuflete: We might ask how many people were misled or felt that the wrong word was used when the releases of the Epstein files were called tranches. Well, in principle we might.
Lest we engage in asides about the relative merits of LIFO vs.FIFO inventory management, let’s just say that (1) we agree that most tranches, by whatever name, are apt to have initial differentiators. (2) Whether those are enduring or temporary is difficult to generalize. If they evanesce they may need to be replaced by other differentiators. Or not.
Peanut Butter, like most foodstuffs and a great many “hard” goods, are marked at the point of manufacture with unique identifiers. That is done both at the unit and lot levels. Other machine readable ID is frequently added as goods transit.
Warehouse management software, if it’s any good, has fields for such data at the levels of “eaches”, cases, pallets, truckloads, etc. Batches and tranches and wads and gobs? I don’t recall seeing those field labels or equivalents, but I’ve been away from that world for nearly three decades now and things change.
All of that leaves me searching for an answer to the question of whether and when and why contextual factors become inherent to tranche definitions.
If the prior tranche of peanut butter is all gone from inventory (because already consumed or distributed to patrons to take with them) before the new tranche arrives, there is no need to organize inventory by tranche at all..
Yup. The inventory at my local food bank is all distributed in a short interval on Tuesday mornings. So the notion of a tranche serves a useful purpose during planning, assembly, and transport, but not subsequent to arrival at the consignee door or dock. Software records endure, however, so the tranche leaves a palimpsest.
I bet some Hatter could have a go at a limerick, if not a proper poem, about peanut butter palimpsests.
Maybe the double dactyl would be the better poetic form for peanut butter palimpsests?
@Jerry F, Por partes, as they say in San Vicente de la barquera…
So I suggest that the widespread meaning has changed, and that it could change again.
I’ve been thinking the same. That’s why I went looking for non-financial examples, and have tried to see if there are changes in the definition. Still mulling it over.
We might ask how many people were misled or felt that the wrong word was used when the releases of the Epstein files were called tranches. Well, in principle we might..
I can only speculate that context informed those who had never heard of “Tranche” before that it meant batch or big bunch or honking heavy load. The named sophisticated transgressors probably had other things on their minds, like how it would affect their re-election bids, but… I digress.
Back to the tranches, I would be surprised if each did not have a manifest listing, in detail, the individual contents. Further, I would expect a competent organization to mark each piece of paper with a machine readable (bar code or equivalent) ID. Current regime? Maybe, maybe not. So the differentiator demanders should be satisfied.
Yes, I’m making a distinction between distinctions. I understand that having something now is different from having it three months from now, and the two tranches probably have different values per share in the company’s accounting when the first is given out, but that doesn’t make what they consist of different.
And now you have brought us back to what I am struggling with. Is a tranche “what they consist of”, or is it that plus bits of context, including differentiators? Suppose the tranche consists of fungible commodities, say grains of wheat or rice destined for a hopper car or silo? Once delivered and co-mingled, what remains?
“Yo soy yo y mi circunstancia” confuses more than it enlightens.
@cuchuflete and J.W.B.: Don’t do this to me! I’ve spent enough time on this thread already.
“Peanut butter” doesn’t work well in either limericks or double dactyls. Maybe an alliterative saga would be better. Let me see…
OK, I’m going with a limerick
What makes the poor software guy blanch
Is searching the files at the franch-
Ise grocer’s to see
Where’s the box of PB,
Or the palimpsest left by that tranche.
@Jerry Friedman
Finest kind, Perfesser!
*applauds*
From what I’ve seen in practice, there usually is a temporal difference in tranches, so I would not object against including that in the definition. What I don’t agree with that other qualitative differences are a necessary part of the definition.
Concerning the general understanding, maybe an analogy. I assume that many, perhaps even a considerable majority of, Americans, when encountering the word banknote, think of a greenish piece of paper with a portrait of a dead president on it, because that’s the kind of banknote they know best. But that doesn’t make “greenish” and “having a picture of a dead president on it” part of the definition of “banknote”.
On the kindness of strangers, Dear Blanche
We depend for our next PB tranche
famishment was so great,
palimpsest we then ate
and for pudding they told us,
“Carte blanche!”
(hides under desk)
“Peanut butter” doesn’t work well in either limericks or double dactyls.
C’mon now. A poet is all-powerful.
or
For double-dactyl purposes I was probably assuming the obvious clipping in “Peanut B. Palimpsest” w/o thinking I needed to spell it out.
@Hans: For whatever historical reasons, I don’t think most AmEng speakers use “banknote” as the primary way of referring to our current paper currency (formally “Federal Reserve Notes” if read carefully)*. My own paradigm visual image of a “banknote” is some foreign thing that maybe says “Bank of England” printed on the front along with a picture of the Queen. I assume that comes from reading set-in-the-UK books where characters frequently referred to paper currency as “banknotes.” (Although I understand the Bank of England is now issuing ones with a picture of the late Queen’s eldest son instead.)
*In both cases “note” as a legal-jargon word is now archaic/meaningless, since a banknote is no longer a piece of paper which obligates the bank that issued it to give you in exchange REAL money (i.e. the specified value in gold or silver coins) when you present it to them.
Or just switch genres and meters.
I can only speculate that context informed those who had never heard of “Tranche” before that it meant batch or big bunch or honking heavy load.
I was wondering if there’s a better word for what I thought “tranche” meant – and AFAICT “batch” is basically it.
(I get the impression that generally a tranche is supposed to be a kind of batch that specifically involves money, or at least some kind of payment, but I’m not very confident about it. I also, somewhat less certainly, get the impression that generally a tranche is supposed to be noticeably large, whereas batches can be much smaller.)
[TIL of the etymology of “batch”: a very old deverbal noun from “bake”.]
But they cross-reference it to trench n., and that in turn to trench v., which has more on the ancestry of the French verb (etymology from 1914):
AHD (at trench) says the same. However, TLFI (at trancher) has a different and more complicated origin; this is cited and summarized by French Wiktionary at tranchier:
TLFI also cites FEW, which has a long article on *trīnicare and descendants. English Wiktionary annoyingly doesn’t cite any sources, but they must have gotten this from TLFI as well.
Epic.
Don’t forget sound symbolism creeping in: TRONC TRONC TRONC is the noise Filemón (of “Mortadelo y”) makes when he pulverizes the ashes of a message he just burned with a hammer (“just to be sure”).
I noticed that the oldest example given there is a direct quote from the then foreign minister, rather than the journalist’s own words. It seemed plausible that the financial background of one or more members of the Hawke-Keating governments led to fairly wide use of the term in government contexts in the 1990s.
But looking further, the sanctions talked about there were already tranches when they were introduced in 1985, and journalists were already using it for releases of archived documents in the US at that time, too: here is a 1986 example. That article’s taken from the Grauniad.
rozele’s suggestion that the word is usually associated with some sort of hierarchy, explicitly included temporal order in that, rang a bell with me. (I don’t think I’ve actually used the word outside a couple of cases where the whole point of talking about tranches was that the data was processed in sequential batches.) I understand the the point that the temporal distinctions present in most of the examples discussed here are on some level different in nature to distinctions in quality, and even that in one of the examples any order/hierarchy present is not immediately obvious. But I’m a bit lost with the peanut butter and the idea that the how the long the division into tranches remains meaningful is important to what the word means.
To the store there came an order:
Jars of Skippy’s Peanut Butter,
One full dozen, Extra Crunchy.
Bring it to the local food bank,
Bring the peanut butter Tuesday…
So that all may know what’s in them,
Do not scribble on the labels,
Do not make them palimpsestic…
Hans : the whole purpose of tranches is they are temporarily separated, to ensure that the receiver complies. At least with monetary ones, and as I understand it.
Tranche is a Romance word, better check Corominas… Yes, he covers it, under tranzar. If I’m reading this right via DeepL, Corominas says the derivation of French trancher from Latin truncāre is phonetically impossible, and “ya sería hora de meter en el desván esta etimología menagiana” (it is high time to consign this Menagian etymology to the attic). But the suggestion of *trīnicare is “inverosímil”. He thinks a Celtic source is most likely, which he reconstructs as *TRENCŌ ‘I cut, I end’, source of e.g. Welsh trengu ‘to die’, tranc ‘end’, ‘death’, trŵch ‘cut, mutilated’, ‘cut, incision’.
There is a Proto-Celtic *truxsos ‘cut off piece, broken off piece’ in Matasović’s Proto-Celtic dictionary. But that has no n. Maybe somebody who knows something about Spanish or Proto-Celtic can explain.
I have nothing to contribute about the user of tranche in financial English, but I thought Hat would be interested in knowing that trincar is dated but understandable Lunfardo for ‘to fuck; shag’
We keep that subject decorously separate from meat-carving, for which we borrowed trinchar from the French.
And then you have truncar ‘to cut off; maim’ from the classical Latin base (assuming, pace Corominas, that it’s related). I wonder if someone in finance hasn’t added *tranchar to that lot
The missing “n” is not a problem, the verb could be an old n-present, with an infix PIE *-ne/n- that only shows up in the present stem (like Latin -linquo, -liqui, -lictum). The problem are the forms with u; there is no way to get from a *tru(n)k- to *trenk- by regular sound change or morphological processes (the same problem as with Latin truncare.)
I thought Hat would be interested in knowing that trincar is dated but understandable Lunfardo for ‘to fuck; shag’
I am indeed; thanks!
And Le Robert Dictionnaire historique notes for trancher:
They favour an etymology from Latin *trinicare, with a possible intermediate *terncare