senior debt

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Senior debt

Debt whose terms in the event of bankruptcy, require it to be repaid before subordinated debt receives any payment.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Senior Debt

A debt 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. In this case, the secured debt is senior debt with respect to the unsecured debt. It is a type of senior security. See also: Absolute priority rule.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

senior debt

A class of debt that has priority with respect to interest and principal over other classes of debt and over all classes of equity by the same issuer. In the event of financial difficulties or liquidation of the borrower's assets, holders of senior debt will have a priority claim. Most loans from financial institutions and certain high-grade debt securities such as mortgage bonds are senior debt. Because senior debt has a relatively secure claim, it is less risky from the point of view of the lender and it pays a lower rate of interest compared with debt of the same issuer having a subordinate claim. Compare junior debt.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
DBRS also confirmed the Issuer Rating and Senior Unsubordinated Debt rating of Genworth MI Canada Inc.
'The notes represent direct, general, unconditional, unsecured, and unsubordinated obligations of the sovereign, and rank equally with the sovereign's other unsecured and unsubordinated debt obligations,' SandP said.
These notes rank pari passu with the company's unsecured, unsubordinated debt, whether currently outstanding or issued in the future.
Senior notes under Far East Horizon's USD4 billion MTN programme will represent direct, unconditional, unsecured and unsubordinated obligations, and will rank at least pari passu with all its other unsecured and unsubordinated debt. The programme's rating reflect the ratings expected to be assigned to senior notes issued under the programme, and are in line with Far East Horizon's Long-Term IDR of 'BBB-'.
"The A1 rating is in line with BOC's foreign-currency senior unsecured debt rating and reflects the unconditional and irrevocable guarantee that will be provided by BOC, covering all unsubordinated debt obligations of BOCNZ," says Daniel Yu, a Moody's Assistant Vice President and Analyst.
In a disclosure on Tuesday, EastWest Bank said the Bangko Sentral ng Pilipinas (BSP) Monetary Board had approved the bank's plan to exercise its call option for unsubordinated debt issued in 2008.
The notes will be secured by certain present and future undertakings, property and assets of Aimia and some of its subsidiaries, ranking pari passu with the rest of the company's existing and future unsubordinated debt.
iPath ETNs typically have a 10 to 30-year maturity and are senior, unsecured, unsubordinated debt securities issued by Barclays, linked to the performance of a market index.
The offering, secured by the state winding-up company Finansiel Stabilitet A/S, is part of the agreement announced earlier in December, which entitled the bank to request a three-year government-backed guarantee for unsubordinated debt of up to DKK4.0bn.
A Northern Rock spokesman said the additional guarantees were designed to maintain the credit ratings on the bank's unsubordinated debt, adding that if they were activated, the cost to the Treasury would be "a few hundred millions of pounds".
According to the company, the notes will be its general senior unsecured obligations and will rank equally in right of payment with all of its existing and future unsubordinated debt and senior in right of payment to all of its future subordinated debt.