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 ratings of the senior debt issued by Intesa Sanpaolo Bank Ireland, Intesa Sanpaolo Bank Luxembourg, S.A.
Summary: Long-term global local currency senior debt rating of A2
The standstill arrangement was entered into in connection with AB's required recapitalisation and not because of any liquidity squeeze, as the bank has sufficient funds to make senior debt repayments.
Summary: Moody's de Mexico assigned a long-term Mexican National Scale senior debt rating of
10 June 2011 - Moody's upgraded today the senior debt rating of Swedish telecom equipment major Ericsson AB (STO:ERIC B) to A3 from Baa1, with a "stable" outlook.
This new regime implements the reform of the Bank Resolution and Recovery Directive agreed at EU level at end-2017, which aims at harmonising the ranking of senior debt in resolution and insolvency and creating a level playing field across the EU.
currency long-term/short-term senior debt; and C- BFSR, which maps to a
10 June 2011 -- Moody's on Thursday gave A1 global local-currency and national-scale senior debt ratings to the second issue of certificados bursatiles bancarios by Mexican bank BBVA Bancomer SA.
The revised Article 46f defines senior preferred debt as the new reference senior debt class and gives German banks the possibility (by specifying so in each notes' issuance documentation) to issue senior non-preferred debt that ranks between senior preferred and subordinated Tier 2 debt.
10 June 2011 -- Moody's said Thursday it gave a B2 global local-currency senior debt rating and national-scale local-currency debt rating to Argentine financial services provider Banco de Servicios y Transacciones SA's second bond issuance, worth up to ARS80m (USD19.5m/EUR13.5m).
Moody's Investors Service says today that over the next few weeks, it will begin a reassessment of the systemic support assumptions that it currently incorporates into its senior debt ratings for UK financial institutions.
SP debt is now the reference senior debt class in Germany and gives banks the ability to issue 'senior non-preferred' (SNP) debt, which ranks between SP and subordinated Tier 2 debt.

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