2. Securities: Class of the US debt securities issued as part of a bond instrument, each part (tranche) characterized by a unique set of features such as maturity, interest (coupon) rate, interest payment date, to suit the needs of different investors. A single bond, such as collateralized mortgage obligation (CMO) may be issued with several tranches, each with its own priority of principal repayment and own CUSIP number. A typical CMO, for example, has four tranches: 'A' (fast pay), 'B' (medium pay), 'C' (slow pay), and 'Z' (no coupon but receives cash flow from the collateral remaining after the previous three tranches have bee satisfied). As one trance matures the next consecutive tranche takes its place.
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