Subordinated debt

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Related to Subordinated debt: Mezzanine debt

Subordinated debt

Debt over which senior debt takes priority. In the event of bankruptcy, subordinated debtholders receive payment only after senior debt claims are paid in full.

Junior Debt

A class of debt that, in the event of insolvency, is prioritized lower than other classes of debt. The most common kind of junior debt is an unsecured loan, which has no collateral. Another kind of junior debt is a secured loan in which another loan has priority on the collateral; a second mortgage is an example of a secured junior debt. This class of debt carries higher risk but also pays higher interest than other classes.

Subordinated debt.

Subordinated debt generally refers to debt securities that have a secondary or lesser claim to the issuer's assets than more senior debt, should the issuer default on its obligations.

In fact, there are also levels of subordinated debt, with senior subordinated debt having a higher claim to repayment than junior subordinated debt.

References in periodicals archive ?
According to Spark Energy, it plans to use the subordinated debt facility to enhance working capital, growth initiatives, capital optimisation, including, subject to lender approval, stock buybacks.
bo national scale local currency subordinated debt ratings to the expected issuance of Bs.
In this context, it is worth highlighting that Fitch's ratings for GCC banks' subordinated debt often factor in a high probability that sovereign support will be available for this debt class if and when required.
All the four Tunisian leasing companies' rated subordinated debt issues are Lower Tier 2 issues.
11 October 2010 - S&P on Friday chopped by one notch its ratings on the non-deferrable subordinated debt guaranteed by four Greek lenders.
The inter-creditor agreement describes the handling of major items such as: a) cross-acceleration; b) blockage of the subordinated debt interest; c) subrogation; and d) bankruptcy rights.
It included a term loan for 84 per cent of the purchase price and associated expenses and subordinated debt for the remainder.
Fannie Mae and Freddie Mac have committed to issuing subordinated debt at least twice a year until the sum of each GSEs' core capital (essentially, the book value of equity capital) plus loan-loss allowance plus subordinated debt equals at least 4 percent of adjusted assets.
The agencies monitor subordinated debt yields and issuance patterns in evaluating the condition of large depository institution organizations.
Today, the subordinated debt market is very sophisticated and its structure is limited only by the creativity of the people involved in structuring the mezzanine loan.
rating to the bank's subordinated debt program and to the first expected