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 ...
A subordinated debt agreement is a kind of unsecured bond or loan whose priority for repayment during claims is below any other senior loans, For this reason, they are also called junior securities. If the borrower is not bale to pay bank the loan amount, then all other creditors will be ...
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...