Subordinated Debt

Subordinated Debt is a loan (or security) that ranks below other loans with regard to claims on assets or earnings. Subordinated debt features a lower priority compared to other bonds of the issuer in the event of liquidation during bankruptcy, and ranks under: the liquidator, government tax government bodies and senior debt holders from the hierarchy of collectors. In finance, subordinated debt is usually debt which rates high after other debts in case a company falls into liquidation or bankruptcy.