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What does subordinated debt mean?

Updated: 9/23/2023
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Subordinate debt means to have a loan lower than other loans with regards on claims of assests or earnings. This simply means that one is only entitled to a specific loan.

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Q: What does subordinated debt mean?
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Related questions

What is meaning of a subordinated term debt?

subordinated term debt


Are bank deposits subordinated debt?

Subordinated debt is a debt that ranks lower than bank deposits. From this point of view subordinated debt can't be deposits


What is the status of subordinated debt?

When a company goes bankrupt a debt can go into subordinated debt. This means the subordinated debt has a lower priority than other debts. Typically this has a lower rating of credit.


Is subordinated debt more senior than senior unsecured?

No. While both tranches of debt are unsecured (no collateral pledged in support of the debt obligation), by definition, senior unsecured ranks higher in the capital structure than subordinated debt, meaning that senior unsecured creditor claims will receive payment prior to subordinated debt creditors upon bankruptcy of the debtor.


What are some typical terms for subordinated debt?

Type your answer here... also known is junior debt or second lien debt.


Who benefits the most by the inclusion of a subordination clause in a mortgage?

It depends on what is being subordinated. Generally, the lender. Homestead exemptions are often subordinated to a mortgage and that benefits the lender.It depends on what is being subordinated. Generally, the lender. Homestead exemptions are often subordinated to a mortgage and that benefits the lender.It depends on what is being subordinated. Generally, the lender. Homestead exemptions are often subordinated to a mortgage and that benefits the lender.It depends on what is being subordinated. Generally, the lender. Homestead exemptions are often subordinated to a mortgage and that benefits the lender.


What are unsecured subordinated notes?

They are a type of debt. Unsecured means there is no security or "collateral" for the debt. (Higher risk loan) Subordinated means it takes a lower position to secured debts (e.g. a bank loan) in the event of insolvecy (bankruptcy). In other words, the bank/government/other secure creditors get their money back first, before the subordinate debts are paid out. A note is simply a contractual debt with an agreement to payment terms etc. This is how an individual investor might lend money to a business. Hope that helps!


What happens to a bond's yield to maturity if investors learn that the bonds are subordinated to another debt issue?

Nothing, but its coupon rate would likely decrease as it is now considered a riskier asset.


What is the meaning of the term 'bank capital'?

"Bank capital" is the net worth of the bank, or its value to investors. It includes retained earnings, reserves, hybrid capital instruments, subordinated term debt.


What services are offered by Mezzanine Financing?

Mezzanine financing is not a company that will offer services but a service that can be offered by companies. Mezzanine financing refers to a preferred equity or a subordinated debt tool that represents a claim on a company's assets.


What does hit the black mean?

its when you are in debt and you come out of debt when you get money.


What does debt outstanding mean?

That u payed your debt in full