What is the definition of senior tranche?

A senior tranche is the highest tranche of a security, i.e. the one deemed least risky. Any losses on the value of the security are only experienced in the senior tranche once all other tranches have lost all their value. For this safety, the senior tranche pays the lowest rate of interest.

The senior tranche may also be split into senior and super-senior tranches. Of the total value of security the senior tranche is usually the largest, sometimes comprising up to 80% of the entire security.