Subordinate Bond

Subordinate Bond

A class of bond that, in the event of liquidation, is prioritized lower than other classes of bonds. For example, a subordinate bond may be an unsecured bond, which has no collateral. Should the issuer be liquidated, all secured bonds and similar debts must be repaid before the subordinated bond is repaid. A subordinate bond carries higher risk, but also pays higher returns than other classes. See also: junior debt.
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Global Banking News-5 March 2010-La Caixa raises 10-year subordinate bond issue(C)2010 ENPublishing - http://www.