A bond to which slices or tranches of an issue belong. A fungible issue (sub-tranche) is a debt issue that is attached to an existing issue (a parent bond), with the same specifications (such as coupon value, coupon frequency, maturity, etc.) as per the terms of the original agreement.

On the funge date, the parent bond absorbs the funged issue(s) so that its amount outstanding is equal to the amount outstanding of the funged bond(s). In other words, the parent bond always reflects an increase in the amount outstanding equal to the funged amount (in a single funded issue or more, as the case might be). The new effective bonds arising from funge event are linked to the existing bond(s), reflecting the replacement relationship involved in the attachment process.

Once absorbed by the parent bond, the funged issues become individually inactive with each having an “individual” amount outstanding of zero.