Subordinated debt

Subordinated debt,

Definition of Subordinated debt:

  1. A debt owed to an unsecured creditor that can only be paid, in the event of a liquidation, after the claims of secured creditors have been met.

  2. Bond, debenture, stock (share) which, by its general nature, takes a lower (subordinate) priority to another (senior) securitys claims on the assets and earnings of the issuer for the payment of dividend, interest, and principal. Holders of senior securities are paid before the holders of the junior securities. For example, common stock (ordinary shares) is junior to preferred stock (preference shares), which are junior to debentures (unsecured bonds), which are junior to mortgage (secured) bonds. Hence, in case of the liquidation of the issuing firm, mortgage bonds will be paid first and ordinary stock the last. Also called subordinated debenture, subordinated security, junior debt, junior security.

How to use Subordinated debt in a sentence?

  1. If you find yourself in subordinated debt you need to work your way out as fast as you can to keep a good reputation.
  2. The company also won a 30 million euro waiver on some of its subordinated debt.
  3. The subordinated debt was not going to be served this month as there were higher priority claims made on this project.
  4. You should know any subordinated debt that you may be able to get and figure out if it will be beneficial for you.

Meaning of Subordinated debt & Subordinated debt Definition