securitisation

Hello Sir
Please explain the following paragraph regarding credit enhancement and tranche:
“Credit enhancement is a key part of the securitisation transaction in structured finance (such as mortgages
and car loans).
A ratings agency will usually advise on the structure of the liabilities created. The A-rated tranche will attract
such investors as banks and other financial institutions as they require low levels of risk exposure. The
reduction in risk for such institutions is compensated for by the increase in risk for investors in subordinated
certificates”
Thank you