What are subordinated debt?

Answer Posted / g.naveen kumar

A loan (or security) that ranks below other loans (or
securities) with regard to claims on assets or earnings.

Also known as a "junior security" or "subordinated loan".
In the case of default, creditors with subordinated debt
wouldn't get paid out until after the senior debtholders
were paid in full. Therefore, subordinated debt is more
risky than unsubordinated debt.

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