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 ?
The notes will represent direct senior unsecured obligations of the Canadian firm and will rank equally in right of payment with all other unsecured and unsubordinated debts of Russel Metals.
The notes issued within the programme will constitute direct, unsecured and unsubordinated obligations of DBS Bank and rank equally with its other unsecured and unsubordinated debts.
The debentures will rank at the same level with all of the company's other unsecured and unsubordinated debts.
The issuance under the programme will constitute direct, unsecured obligations of Manitoba Telecom Services and will rank equally with all other unsubordinated debts of the company.
The notes will be listed in Singapore and rank equal with all other unsecured and unsubordinated debts of the lender.