Subordinated debenture bond

(redirected from Subordinate Debenture)

Subordinated debenture bond

An unsecured bond that ranks after secured debt, after debenture bonds, and often after some general creditors in its claim on assets and earnings. Related: Debenture bond, mortgage bond, collateral trust bonds.

Subordinated Debenture Bond

A class of unsecured bond that, in the event of liquidation, is prioritized lower than other classes of debt. In essence, a subordinated debenture bond is an unsecured loan, which has no collateral. Should the issuer be liquidated, all other bonds and debts must be repaid before the subordinated debenture bond is repaid. This class of debt carries higher risk, but also pays higher interest than other classes. It is a type of junior debt.
References in periodicals archive ?
With long floating period, the interest rate of non-cumulative perpetual subordinate bank debentures is usually higher than that of the non-perpetual subordinate debentures by more than 100 basis points (1 basis point = 0.01 of a percentage point).
The agency also gave its twAA issue rating to the bank's upcoming series 99-4 TWD2bn 10-year unsecured subordinate debentures, which the bank will use to strengthen its regulatory capital ratio.
Birch Mountain Resources Ltd (TSX: BMD) (AMEX: BMD), a Canada-based company that explores and develops mineral resources, has reported that it has not made a scheduled interest payment to the holders of the convertible unsecured subordinate debentures (convertible debentures).
Eighteen of 18,00 investors who held thrift certificates or subordinate debentures in the defunct MorAmerica Financial Corporation brought suit against its auditor, McGladrey, Hendrickson & Pullen (MHP).