问题如下：
The creation of bond classes with a waterfall structure for sharing losses is referred to as:
选项：
A.time tranching.
B.
credit tranching.
C.overcollateralization.
解释：
B is correct. Credit tranching is a form of credit enhancement called subordination in which bond classes or tranches differ as to how they will share losses resulting from defaults of the borrowers whose loans are part of the collateral. This type of protection is commonly referred to as a waterfall structure because of the cascading flow of payments between bond classes in the event of default.
A is incorrect because time tranching involves the creation of bond classes that possess different expected maturities rather than bond classes that differ as to how credit losses will be shared. Time tranching involves the redistribution of prepayment risk, whereas credit tranching involves the redistribution of credit risk.
C is incorrect because although overcollateralization is a form of internal credit enhancement similar to subordination, it is the amount by which the principal amount of the pool of collateral exceeds the principal balance of the securities issued and backed by the collateral pool. Losses are absorbed first by the amount of overcollateralization and then according to the credit tranching structure.
waterfall structure 是什么？
