In the event that the issuing company goes out of business, the junior debt has a smaller probability of being paid back, either with money or with assets, since all higher-ranking debt will be given priority. Junior debt is also called subordinated debt, due to its position in the debt hierarchy. One common junior debt is the seconds mortgage which ranks behind the first mortgage and has a lesser claim in the event of default.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
junior debt — finance provided by the equity funders, who are also known as the junior lenders. Also known as subordinated debt. Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010 … Law dictionary
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junior debt — debt that will be repaid after the preferred debts are repaid … English contemporary dictionary
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