Thus, if a company files for bankruptcy, senior debt claims are paid first. All other debt is subordinated (junior). Collateral from asset-backed debts may be sold to pay off senior secured debt. Senior unsecured debt is then paid using other company assets. If any assets remain, subordinate...
Senior Debt and Junior Debt (Subordinated Debt or Mezzanine Debt) both are long-term liabilities or non-current liabilities of the company. They are an important source of finance indebt financing. There are times when the Cost of Equity exceeds the Cost of Debt; in such a situation, prefere...
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. Unsecured debt is issued simply on the good name of the borrower and faith that ...
This risk is generally higher for subordinated unsecured loans or debt, which are not backed by a security interest in any specific collateral. Subordinated Loans generally have greater price volatility than Senior Loans and may be less liquid.Below Investment Grade Securities Risk...
This risk is generally higher for subordinated unsecured loans or debt, which are not backed by a security interest in any specific collateral. Subordinated Loans generally have greater price volatility than Senior Loans and may be less liquid.Below Investment Grade Securities Risk...