SENIORS

Today's word: SENIORS
Theme for this fortnight: BONDS

 

 

A debt security, or bond, that takes precedence over other unsecured notes and must be repaid in the event of bankruptcy. Senior notes are relatively secure because of their priority status in the event of liquidation. With this added security comes a reduced interest or coupon rate as compared to junior bonds.

                Borrowed money that a company must repay first if it goes out of business. Companies have a number of options for obtaining financing, including bank loans and the issuance of bonds and stocks. Each type of financing has a different priority level in being repaid if the company decides to liquidate. If the company goes under, the holders of each type of financing have different levels of rights to the company's assets.