Z-tranche

Z-tranche

The last tranche in a collateralized mortgage obligation. A Z-tranche accrues periodic interest but receives no cash payments until previous tranches from the same CMO are retired.
References in periodicals archive ?
Instead, a Z-tranche is credited "accrued interest" and the face amount of the bond is increased at the stated coupon rate on each payment date.
With regard to factors applied to asset classes, the longer-term factor credit for Z-tranche collateralized mortgage obligations (CMO) was decreased from 35% to 15%.
Although approximately 24% of the mortgage-backed securities are z-tranche securities, notorious for their potential volatility, Provident uses them to back disability income liabilities, and the particular securities purchased impose minimal interest-rate risk to the portfolio.
Although approximately 11% of the mortgage-backed securities are z-tranche securities, notorious for their potential volatility, Provident uses them to back disability income liabilities, and the particular securities purchased impose minimal interest rate risk on the portfolio.