Subordinated debt

The subordinated loan (also junior debt ) is a term of corporate finance. It is a loan to a company whose refund may only be performed in the event of liquidation or bankruptcy of the company, after all non-subordinated loans ( debt) were refunded. However Subordinated loan capital shall be refunded before the equity, that is, the owner or owners may invested capital or profits earned by the company, only then remove after these subordinated loans were serviced. The subordination is achieved by the agreement to subordinate ( subordination ). A rank is established for the case that the assets of the company are not sufficient to serve all demands.

Subordinated loans play a significant role in the area of ​​mezzanine capital as hybrid financial instruments. Stay accounting law debt, but are to be regarded as part of the corporate finance as an intermediate form between equity and debt.

Subordinated loans often appear in the form of shareholder loans. Common names for subordinated loans are subordinated debt, subordinated debt, mezzanine debt or unsecured junior debt.

Junior & Senior Subordinated Notes

Junior Subordinated Notes (including Junior Notes ) are secured subordinated compared to Senior Subordinated Notes (including the Senior Notes ). In Junior Subordinated Notes is the form of subordinated loans that pose the highest risk and the equity - similar. Senior Subordinated Notes, however, are virtually priority subordinated loans, which in comparison to other loans subordinated, however, are collateralized primarily to some remaining loans.