--- title: Commercial Loans and Fun Blog | what is a tranche description: what is a tranche | George Blackburne, owner, offers insight into the commercial loans and mortgage industry in this Commercial Real Estate Loan Tips blog. --- [![c-loans-logo-2025](https://info.c-loans.com/hs-fs/hubfs/images/c-loans-logo-2025.png?width=183&height=86&name=c-loans-logo-2025.png)](https://c-loans.com) [Terms of Use](https://www.c-loans.com/terms-of-use) | [Disclaimer](https://www.c-loans.com/disclaimer) | [Blog](https://info.c-loans.com/) # Commercial Loans and Fun Blog ## [Video Lesson:  Commercial Loan Securitization and Tranches](https://info.c-loans.com/video-lesson-commercial-loan-securitization-and-tranches) Posted by [George Blackburne](https://info.c-loans.com/author/george-blackburne) on Wed, Jun 30, 2021 - [Tweet](https://twitter.com/share) ![pancakes](https://info.c-loans.com/hs-fs/hubfs/pancakes.jpg?width=609&name=pancakes.jpg) Some of the cheapest commercial mortgage money in the whole world comes from trusts.  There are trillions and trillions of dollars currently invested in trusts.   [![Apply For a Commercial Loan to Blackburne & Sons](https://no-cache.hubspot.com/cta/default/37671/34e9010d-6f3b-4979-93c2-9e705da5a9fc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/34e9010d-6f3b-4979-93c2-9e705da5a9fc)   ![Screen Shot 2021-06-29 at 4.17.39 PM](https://info.c-loans.com/hs-fs/hubfs/Screen%20Shot%202021-06-29%20at%204.17.39%20PM.png?width=400&name=Screen%20Shot%202021-06-29%20at%204.17.39%20PM.png) [![Nine-Hour Video Training Course How to Broker Commercial Loans](https://no-cache.hubspot.com/cta/default/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f)   For example, a wealthy dad might create a trust for his two minor children, where they receive a monthly income and the payment of their education for twenty-five years, until they reach the age of, say, 30 years old. But here's the thing.  The trust documents will often say that the trustee is only allowed to invest in bonds with a certain credit rating; e.g., BBB or better.   [![Free Commercial Loan Software](https://no-cache.hubspot.com/cta/default/37671/f8924837-4c27-4eb1-a5d8-c49f9b09d9e8.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/f8924837-4c27-4eb1-a5d8-c49f9b09d9e8)   [Click here to view the video lesson](https://youtu.be/5ceP1aPDBD4). [![How To Market For Commercial Loans  Video Course ](https://no-cache.hubspot.com/cta/default/37671/31b3aab7-d992-4293-81e6-ba38a950a89d.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/31b3aab7-d992-4293-81e6-ba38a950a89d)   Therefore, in order to invest in commercial real estate loans, those commercial loans - more precisely, the bonds *backed* by those commercial loans - must be *rated *by a bond rating agency, such as Standard & Poor's Global Ratings, Moody's, and Fitch Ratings. The process of taking around 80 large commercial real estate loans - totaling, say $1.5 billion to $3 billion - and turning them into bonds that can be rated by a bond rating company is called *securitization*.   [![Free Commercial Loan Placement Kit](https://no-cache.hubspot.com/cta/default/37671/882eb54a-a8b4-4c38-a2ed-605338b6f07a.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/882eb54a-a8b4-4c38-a2ed-605338b6f07a)   ![Screen Shot 2021-06-29 at 4.17.04 PM](https://info.c-loans.com/hs-fs/hubfs/Screen%20Shot%202021-06-29%20at%204.17.04%20PM.png?width=359&name=Screen%20Shot%202021-06-29%20at%204.17.04%20PM.png)   [![Submit Your Loan to 750 Commercial Lenders Using C-Loans.com.  It's Free!](https://no-cache.hubspot.com/cta/default/37671/dcd11210-cbb0-42bd-b761-d0cb0da003c9.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/dcd11210-cbb0-42bd-b761-d0cb0da003c9)   The bonds themselves are called *commercial mortgage-backed securities *("CMBS").  The CMBS industry is huge, and it helps to provide permanent commercial loans, with rates not much higher than those offered by life insurance companies ("life companies").  Life companies offer the lowest interest rates in commercial real estate finance ("CREF") and get the safest, most desirable commercial loans. Today's three-minute video lesson attempts to quickly explain the concept of a *tranche*.    A tranche is a division or portion of a pool or whole.  Think of a tranche as one of the pancakes in a tall stack of flapjacks.   [![Free SBA Loan Leads](https://no-cache.hubspot.com/cta/default/37671/3d676168-33f5-408a-9680-b5e7a5137fa6.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/3d676168-33f5-408a-9680-b5e7a5137fa6)   ![Screen Shot 2021-06-29 at 4.19.34 PM](https://info.c-loans.com/hs-fs/hubfs/Screen%20Shot%202021-06-29%20at%204.19.34%20PM.png?width=446&name=Screen%20Shot%202021-06-29%20at%204.19.34%20PM.png)   [![Free List of 3,159 Commercial Lenders Sort By Your Own Criteria](https://no-cache.hubspot.com/cta/default/37671/edc33fe8-9d87-477b-bf2f-07a33d3d2d24.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/edc33fe8-9d87-477b-bf2f-07a33d3d2d24)   Specifically, a tranche is 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, rate of return, or risk. Confused?  This short video training lesson should help.   [![Free $549 Training Course](https://no-cache.hubspot.com/cta/default/37671/614cb500-3fa5-40c4-9f52-3508652629cf.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/614cb500-3fa5-40c4-9f52-3508652629cf)   ![Screen Shot 2021-06-29 at 4.18.07 PM](https://info.c-loans.com/hs-fs/hubfs/Screen%20Shot%202021-06-29%20at%204.18.07%20PM.png?width=454&name=Screen%20Shot%202021-06-29%20at%204.18.07%20PM.png)   [![Get Four Free Commercial  Training Courses](https://no-cache.hubspot.com/cta/default/37671/0823a684-b4a7-44a5-bdd5-22f0164bab11.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/0823a684-b4a7-44a5-bdd5-22f0164bab11)   [![Subscribe to the Commercial Loans and Fun Blog](https://no-cache.hubspot.com/cta/default/37671/a3bd32c3-bff3-4066-9ca8-2ec475fb5bbc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/a3bd32c3-bff3-4066-9ca8-2ec475fb5bbc)     0 Comments [Click here to read/write comments](https://info.c-loans.com/video-lesson-commercial-loan-securitization-and-tranches#comments-listing) Topics: [what is a tranche](https://info.c-loans.com/topic/what-is-a-tranche), [what does securitization mean](https://info.c-loans.com/topic/what-does-securitization-mean) [All posts](https://info.c-loans.com/all) ### George Blackburne III Owner of C-Loans, Inc. ![George Blackburne III C-Loans Owner](https://info.c-loans.com/hs-fs/hubfs/George%20Head%20Shot%20Small%205%20by%207%20copy.jpg?width=158&name=George%20Head%20Shot%20Small%205%20by%207%20copy.jpg) ### Subscribe via E-mail ### Connect with C-Loans ## [![Get the Latest Scoop on C-Loans Inc.](https://no-cache.hubspot.com/cta/default/37671/bacfb58b-143e-40d7-b126-33c182b5b90b.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/bacfb58b-143e-40d7-b126-33c182b5b90b) C-Loans.com® is sponsored by  C-Loans, Inc. — For more information, contact Tom Blackburne 555 University Ave., Suite 150, Sacramento, CA 95825 Telephone: (916) 338-3232 x 317 * Tom Blackburne in Indiana: (574) 210-6686 * Fax: (916) 338-2328 Real Estate Broker -- California Department of Real Estate -- License Number 01330173 Arizona Dept. of Financial Institutions – License Number 0909472 The Florida Mortgage Brokers License Number: 0708758 [Read our many client Success Stories](https://c-loans.com/mortgage-brokers-overview/success-stories/) » © 2025 C-Loans, Inc. 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