Subordinated debenture bond

(redirected from Subordinate Debenture)

Subordinated debenture bond

An unsecured bond that ranks after secured debt, after debenture bonds, and often after some general creditors in its claim on assets and earnings. Related: Debenture bond, mortgage bond, collateral trust bonds.

Subordinated Debenture Bond

A class of unsecured bond that, in the event of liquidation, is prioritized lower than other classes of debt. In essence, a subordinated debenture bond is an unsecured loan, which has no collateral. Should the issuer be liquidated, all other bonds and debts must be repaid before the subordinated debenture bond is repaid. This class of debt carries higher risk, but also pays higher interest than other classes. It is a type of junior debt.
References in periodicals archive ?
In turn, the convertible subordinate debentures issued upon exchange of the special debentures will have a five-year term from the date of issuance of the convertible debentures (subject to the right of the holder to extend for two additional terms of one year each).