Secured vs. Unsecured Debt Generally, senior debt is also secured debt, while subordinated debt is unsecured debt. That is, the debt has not been secured through the pledging of any kind of specific collateral.
Senior debt usually carries the lowest interest rate levels. This is because it often has the highest priority, but also comes with the lowest risk. Collateral is often used to help repay the senior debt which makes it low risk for issuers. Since subordinated debt has a lower priority whe...