- Senior debt
finance, senior debt, frequently issued the form of a senior note, is debt that takes priority over other debt securities sold by the issuer. Senior debt has greater seniority in the issuer's capital structurethan subordinated debt. In the event the issuer goes bankrupt, senior debt theoretically must be repaid before other creditors receive any payment.
Senior debt is often secured by collateral on which the
lenderhas put in place a first lien. Usually this covers all the assetsof a corporationand is often used for revolving creditlines. It is the debt that has priority for repayment in a liquidation.
It is a class of
corporate debtthat has priority with respect to interestand principal over other classes of debt and over all classes of equity by the same issuer.
* [http://www.investorwords.com/4486/senior_debt.html Senior debt]
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