Subordinated Debt
A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings.
Also known as a "junior security" or "subordinated loan". Investopedia Says:
In the case of default, creditors with subordinated debt wouldn't get paid out until after the senior debtholders were paid in full. Therefore, subordinated debt is more risky than unsubordinated debt. Related Terms:
Absolute Priority
Bankruptcy
Coterminous
Default
Junior Security
Preferred Dividend
Second Mortgage
Senior Issue
Senior Security
Unsubordinated Debt |