Senior security

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Senior security

A security that, in the event of bankruptcy, will be redeemed before any other securities.

Senior Security

A security that has higher priority compared to another in the event of liquidation. That is, if a company goes bankrupt and is liquidated, holders of secured debt must be paid before holders of unsecured debt. Holders of unsecured debt must be paid before preferred shareholders and finally, preferred shareholders must be satisfied before common shareholders. In the forgoing, each security is a senior security compared to the following one. See also: Absolute Priority Rule.
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The Fund's fundamental investment restriction regarding borrowing money and issuing senior securities is now as follows: "The Fund may not borrow money or issue senior securities to the extent such borrowing or issuance would violate the 1940 Act.

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