subordinate

Subordinated

Describing a class of security that, in the event of liquidation, is prioritized lower than other classes of security. For example, a subordinated security may be an unsecured loan, which has no collateral. Should the issuer be liquidated, all secured bonds and debts must be repaid before the subordinated security is repaid. A subordinated security carries higher risk but also pays higher returns than other classes. See also: Junior Debt.

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subordinate

To agree to place one's mortgage or other interests in a junior position relative to another. See subordinated ground lease and subordinated mortgage.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.