Subordinated debt Holders of subordinated debt rank below most other bondholders when it comes to paying them back if the company goes backrupt.
Holders of senior debt secured by a claim to assets of the company will be first in line, followed by junior /
subordinated debt holders, followed by preferred stockholders, and finally those holding common stock.
Flaherty supports the proposal, arguing in an April letter to his G20 counterparts that embedded contingent capital would «force the costs of excessive risk - taking to be removed from taxpayers and placed on to the right people — shareholders and
subordinated debt holders — thus improving market discipline.»
Not exact matches
Under European rules, a public recapitalization entails that equity
holders and
subordinated creditors (owners of high - ranking
debt) will have to share the burden and enter a «bail - in» of 8 percent (minimum) before public money is used.
While
holders of
Subordinated Debentures do enjoy a legally enforceable contractual right to cash payments, as a practical matter, having that enforceable right usually is akin to having the right to commit suicide because a
Subordinate's rights to cash payments virtually always are subrogated to the senior
debts» rights to priority payments.