Junior Debt

December 25, 2013  |     |     |   0 Comment

Junior debt or subordinated debt is unsecured debt or debt that has lower hierarchy than senior debt owed by a borrower to its creditors.

This means that, in the case of a borrower defaulting on his debt, holders of junior debt must wait for senior debt holders to collect on their debt before junior debt holders can receive any compensation. Junior debt holders have a lower priority claim on the loan collateral than senior debt holders.


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