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Subordinated debt. In finance, subordinated debt (also known as subordinated loan, subordinated bond, subordinated debenture or junior debt) is debt which ranks after other debts if a company falls into liquidation or bankruptcy . Such debt is referred to as 'subordinate', because the debt providers (the lenders) have subordinate status in ...
United States law. [edit] Subordination of debt. [edit] Subordinationis the process by which a creditor is placed in a lower priority for the collection of its debt from its debtor's assets than the priority the creditor previously had,[1]In common parlance, the debt is said to be subordinated but in reality, it is the right of the creditor to ...
Mezzanine capital is often a more expensive financing source for a company than secured debt or senior debt. The higher cost of capital associated with mezzanine financings is the result of it being an unsecured, subordinated (or junior) obligation in a company's capital structure (i.e., in the event of default , the mezzanine financing is only ...
The broker-dealer adds to this total the amount of any "qualifying subordinated debt" it owes. This preliminary amount is the broker-dealer's "tentative net capital." After so computing "tentative net capital" the broker-dealer adjust that amount by making further reductions in the value of its securities based on percentage reductions ...
Tier 2 capital. Tier 2 capital, or supplementary capital, includes a number of important and legitimate constituents of a bank's capital requirement. [ 1][ note 1] These forms of banking capital were largely standardized in the Basel I accord, issued by the Basel Committee on Banking Supervision and left untouched by the Basel II accord.
Subordinated debt refers to a class of obligations that are contractually subordinated in ranking to all of the senior obligations (i.e., general non-subordinated obligations) of the company, whether they are secured or unsecured. Although the second lien loan's security interest is subordinated to the first lien loan's interest in the pledged ...
Senior debt. In finance, senior debt is debt that takes priority over other unsecured or otherwise more "junior" debt owed by an issuer. Senior debt is frequently issued in the form of senior notes or referred to as senior loans. Senior debt has greater seniority in the issuer's capital structure than subordinated debt.
Tier 1 capital is the core measure of a bank 's financial strength from a regulator 's point of view. [note 1] It is composed of core capital, [1] which consists primarily of common stock and disclosed reserves (or retained earnings ), [2] but may also include non-redeemable non-cumulative preferred stock. The Basel Committee also observed that ...