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Junior Debt |
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Junior debt (subordinate debt) Debt whose holders have a claim on the firm's assets only after senior debtholder's claims have been satisfied. Subordinated debt. Junior Debt A class of debt that, in the event of insolvency, is prioritized lower than other classes of debt. The most common kind of junior debt is an unsecured loan, which has no collateral. Another kind of junior debt is a secured loan in which another loan has priority on the collateral; a second mortgage is an example of a secured junior debt. This class of debt carries higher risk but also pays higher interest than other classes.
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