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.