yodacaia

accrual tranche's principal repayment amount increases while its interest payments are diverted to the Senior tranches. Once all senior tranches are paid off, it receives both interest and principal for the remainder of its life.

Reinvestment risk is avoided on the accrual tranche since no interest is paid on the tranche. So there is no question of reinvestment of the amount till such time it is the only tranche.

CP