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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18 March 2011 -- Moody's has rated at B1 two senior bond issues and at B2 two subordinate bond issues of Kazakh lender Eurasian Bank.
Standard Chartered successfully also arranged a BDT 2 billion subordinate bond for Dhaka Bank Limited.
* If tighter spreads on subordinate bonds have pushed down pricing in the origination market, and originators of loans destined for securitization are far more willing to hold this paper than they were two years ago, aren't loan originators significantly exposed to the risk of a change in tastes among subordinate bond buyers?
Global Banking News-5 March 2010-La Caixa raises 10-year subordinate bond issue(C)2010 ENPublishing - http://www.enpublishing.co.uk
This cushion is higher for the senior bonds, supporting the one notch rating distinction from the subordinate bonds.
Global Banking News-September 23, 2014--Bancolombia to issue USD501m in subordinate bonds
The bank's subordinate bonds have an AA+ rating from Fitch Ratings.
announced Friday it will raise about 250 billion yen by issuing subordinate bonds to U.S., European and Asian institutional investors this month to return part of the 3.1 trillion yen in public funds it owes to the government.
The two-notch ratings distinction between the senior and subordinate bonds reflects the deeply subordinated nature of the subordinate bonds and a weaker security package.