Traunch Vs. Tranche: When To Use Each One In Writing?

Many English words have similar spellings or almost negligible pronunciations. Therefore, differentiating such words can be difficult unless you know their meanings and the contexts where they are used. An example of such words is traunch and tranche, and looking at traunch vs tranche helps you learn more.

“Traunch” refers to a portion in a series of payments for a specific goal and with measured aims for future allotments; the payments are scheduled over a specific time. Tranche describes diverse levels of securities with varying credit scores. A tranche is often a share of a greater deal.

The words “tranche” and “traunch” are often confused for each other because they both apply in the financial sector. This also makes them hard to differentiate. For this reason, this post aims to shed light on the differences between these words, how to use them in sentences of diverse applications, and their meanings.

Definitions Of Traunch And Tranche

Looking through online and offline dictionaries, you will notice that trench and traunch are mentioned as related words. However, they have varying meanings, as explained below.

Definition of Traunch

In finance, traunch refers to a portion in succession or sequence of allotments. The portion is scheduled for payment over a specified amount of time. However, the subsequent payments after each traunch are subject to accomplishing the specified performance metrics.

This word is primarily applied in economics, company funding, or venture capital. However, its origin is not finance-related. Traunch comes from the French word “tranche,” meaning “to slice or partition.”

Secondary Meanings of Traunch

In true English word form, this word has more than one meaning. Make sure you know all the meanings before usage. The secondary meanings for traunch are:

• As a verb, traunch means to divide something large into smaller parts or portions. The portions are part of a predetermined series. (Example: The manager received the first traunch of the women’s fund.)
• As a noun, traunch refers to one out of a series of funds for a certain purpose. It also refers to one set of a series. (Example: According to our contract, the bank should provide the first traunch of the loan at the beginning of March.)
• As an adjective, traunch means “something that is divided into parts.” (Example: The company decided to traunch the lawsuit winnings it owes its terminated employees.)

Definition Of Tranche

In finance, tranche refers to one of a series of levels of risk maturities comprising multiple-class security.

This word applies in both French and English. In French, it means “to slice.” Some sources also explain that the original source of this word is Old French “trancer,” meaning “to cut.”

Secondary Meanings of Tranche

While this word is often used in structured finance, it is not limited to this application. Below are its other meanings in varying fields. Note each keenly, and you will get to use the word with confidence.

In insurance, a tranche is a distinct unit of a solo policyholder’s benefits concerning isolated premium additions. (Examples: I was asked to wait as the insurance company calculated my proposed tranche.)

In pensions, a tranche is a scheme member’s benefits concerning accrual periods with varying requirements or rules. (Example: Pension Schemes make money because most people do not know about things like tranche requirements.) As a noun, tranche refers to a slice or portion of a whole, especially money.

How To Properly Use Traunch And Tranche In A Sentence

The beauty of learning the meanings and differences of various words is to use them correctly, irrespective of context. For this reason, we have prepared the following sections featuring the appropriate uses of traunch and tranche.

How And When To Use Traunch

Use the word traunch as a verb, noun, or adjective, as its definitions suggest. Also, you can use it in the following contexts describing;

• The process of dividing something into portions
• A portion of a series of payments in structural financing
• The act of slicing something into small portions

Additionally, you can use various forms of the word traunch. They include the following;

• Traunches. The plural form (Example: Both companies received their first funding traunches a few months after signing the contract with the bank.)
• Traunched. The past tense form (Example: The investment funds were traunched, and all recipient companies were given performance merits for guidance.)
• Tranching. The present participle form. (Example: The Central Bank prefers the traunching technique over other funding methods because of the hidden benefits.)
• Traunched. The past participle form.

How And When To Use Tranche

This word mainly applies as a verb or noun. Apply it when describing one of several parts or sections into which something, like a physical object, is divided.

It is also a perfect word when referring to a set of financial risk classes and when describing distinct sets of subdivisions of insurance policyholder or pension member’s benefits concerning specific premium increments.

Other word forms of tranche are;

• Tranches. The plural form. (Example: All the Central Bank tranches depend on specific performance merits.)

Examples Of Traunch And Tranche Use In Sentences

With the knowledge of the meanings and applications of both words, you can use them in sentences. Below are examples for inspiration;

Example sentences of “traunch”

1. You will be lucky if the bank agrees to traunch your loan with your credit score.
2. The company’s unethical practices will risk them losing the next traunch of funding.
3. We will find out the effects of the new Bill in the first traunch of released prisoners.
4. The startup lost its subsequent traunch of funding when the wrongful termination lawsuit hit it.
5. Jane was amazed by how the people’s reaction to the new administration changed after the first traunch of change implementations.

Example sentences of “tranche”

1. The revival of social democracy could provide a novel tranche of politically-fueled union activists.
2. All the investors in each tranche received substantial interest payments despite being unconventional.
3. The second tranche was not released until SACCO paid off all its first tranche holders.
4. I was so impressed to discover that the company had covered its entire retain tranche before the end of its first year in business.
5. After the damage assessment, the organization will give the tsunami disaster the first tranche of relief funds.

Differences Between Traunch And Tranche

Traunch and tranche are often used interchangeably. This is because both words are heavily applied in structural finance, and they have a similar origin (Old French). Traunch is derived from the French Word “tranche.” On the other hand, “tranche” comes from the Old French word “trancer.” Both origin words mean “to slice or cut.”

More so, they both mean “to slice or break something into portions, especially money.” While not so significant, there are some differences between these two words. They include the following:

• Traunch is one of a sequence of allotments, while trance is one of a set of risk maturities of levels of securities.
• You can use traunch as a noun, verb, and adjective. However, tranch is only applicable as a noun.
• Traunch has many word forms, while tranche only has a plural form.

Conclusion

The overall meaning of traunch is “to slice.” However, in finance, it means dividing payments into portions. Alternatively, a tranche is a portion of a block of assets like cash or securities. Besides their heavy application in structural finance, both words also mean “to slice.” However, understanding the difference between these words is not always easy if you are not into finance. Thanks to this post on traunch vs tranche because you can now differentiate these two words.