Accrual Bond

Kind of a moody Zero Coupon Bond. They are not required to make period interest payments, but rather, interest accrues until an eventual principal payoff. However, at their will, they can proactively start to pay down the principal at some point along the way, based on whatever the indenture says is allowable.

At this point, those pay-down pieces are called Z-tranches. Cool name. If we had a dog, we'd name it Z-Tranche.