This notion is further supported by the inherent risk premium for stocks over bonds because stockholders are
behind bondholders in the first lien on a company's resources in bankruptcy.
In addition, holders of ETNs will be paid
behind bondholders and preferred stock holders.
If a company is liquidated, preferred shareholders rank ahead of common shareholders but
behind bondholders.
Not exact matches
But, for those that are
behind the curve, the financings of last resort are protective, at least for a little while, of management teams and
bondholders.
For
bondholders, usually a trust company appointed by the company to protect the security
behind the bonds and to make certain that all covenants of the trust deed relating to the bonds are honoured.
If the company issuing the hybrid securities becomes insolvent, hybrid investors generally rank
behind senior
bondholders and other creditors.
In the case of liquidation of the business, owners of common stock are last in line
behind creditors,
bondholders, and preferred stockholders.
White & Case's restructuring lawyers, meanwhile, continue to be busy, picking up assignments for life sciences solutions company Novasep and
bondholders of Residential Capital, the embattled mortgage unit of Ally Financial, which is being urged to stand
behind its struggling subsidiary.