Page 170 - PRIAA Glossary

TRANCHE
A term most frequently used in relation to structured
credit derivatives, tranches are categorised by their risk in relation to the probability of being impacted by a default in
the underlying portfolio of credits. The risk is defined by an attachment and detachment point to the capital structure. For example, an equity tranche (0-3% attachment/detachment); mezzanine (3-7%); senior (7-12%). Riskier tranches will command higher premiums (returns) for the protection of
the seller than like-for-like tranches that are senior in the capital structure. Tranches in funded products may be rated, according to the probability of the portfolio suffering one or more defaults. Accordingly, investors can use the product to meet their bespoke risk/return requirements.
TRANSACTION SUPPLEMENT
The short confirmation that evidences a transaction under a master confirmation agreement (MCA)—commonly referred to as a “short form”.
TRANSFER OF TITLE
An agreement whereby the collateral provider grants full title over the collateral assets transferred to the collateral taker. The collateral taker has full legal ownership of the assets and can use them without restriction.
TRANSMISSION SYSTEM OPERATOR (TSO)
An organisation responsible for ensuring the efficient use and reliable operation of a supply network such as power generation facilities. Individual TSOs may cover whole countries or regions. The responsibilities may vary by jurisdiction and include coordinating capacity allocation, overseeing the balancing
of inputs and outputs, managing system emergencies and reserves, ensuring new facilities are built when needed and the settlement of charges for use of the network.
TREASURY BILL
Debt issued by the US government, with a maturity of less than 1 year.
168