subordinated debenture

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.

subordinated debenture

An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before holders of subordinated debentures can receive a settlement. Frequently, this settlement amounts to relatively little. Because of the risk involved, the issuers have to pay relatively high interest rates in order to sell these securities to investors. Many issues of these debentures include a sweetener such as the right to exchange the securities for shares of common stock. The sweeteners are included so that interest rates on the subordinated debentures can be reduced below the level that would be required without them. Subordinated debentures without the conversion option appeal to risk-oriented investors seeking high current yields. See also convertible security.
References in periodicals archive ?
The junior subordinated debentures are redeemable at the option of SunAmerica on or after June 1997, or at any time under certain limited circumstances related to tax events at a redemption price of $25 per junior subordinated debenture.
George stated: "Because of changing capital market conditions, we have concluded that proceeding with the convertible subordinated debenture offering at this time would not be in the best interests of our shareholders.
We are reviewing the "BBB" (Triple-B) rating of the 12-5/8 percent subordinated debenture issue for potential upgrade pending an analysis of the irrevocable trust documents.
Therefore, a holder of a $1,000 senior subordinated debenture due 1998 will receive $719 in total consideration, a holder of a $1,000 subordinated debenture due 2001 will receive $332 in total consideration, and a holder of a $1,000 (of claim amount) 16-1/2% subordinated discount debenture will receive $133 in total consideration.
Thus, based upon a value of between $525 million and $570 million, a holder of a $1,000 Senior Subordinated Debenture due 1998 would receive between approximately $790 and $860 in value, a holder of a $1,000 Subordinated Debenture due 2001 would receive between approximately $370 and $400 in value, and a holder of a $1,000 in accreted value of Junior Subordinated Debenture due 2006 would receive between approximately $130 and $140 in value.
5% First Priority Senior Subordinated Debentures - Due December 15, 2003; -- 4 1/2% Second Priority Senior Subordinated Debentures (Series A) - Due June 15, 2004; and -- 4% Second Priority Senior Subordinated Debentures (Series B) - Due June 15, 2004.
Ivanhoe announced today that it has received tenders for approximately $188 million principal amount of outstanding convertible subordinated debentures of Cambridge Shopping Centres Limited (TSE: CBG) in favor of its offers to purchase all of the Cambridge outstanding convertible subordinated debentures (excluding the 6% Convertible Subordinated Debentures due June 30, 2007).
03% Subordinated Debentures due February 28, 2017 of Morgan Stanley Finance plc, and 65,810 related purchase contracts of Morgan Stanley.
Ivanhoe today announced the prices for its Offers to Purchase all of Cambridge Shopping Centres Limited's (TSE:CBG) outstanding convertible subordinated debentures (excluding the 6% Convertible Subordinated Debentures due June 30, 2007).
NYSE: PRG) (the "Company") today announced that it did not make the interest payment due today related to the Company's outstanding 6% Convertible Subordinated Debentures due 2001, in the principal amount outstanding of $125.
0% senior notes due 2034 and an 'A' rating to AGL's $150 million series A enhanced junior subordinated debentures due in 2066.
s (Nasdaq-NNM: JOIN) (Intercable) $160 million 11-1/2% senior subordinated debentures due 2004, $100 million 10-1/2% senior subordinated debentures due 2008, and $19.