[...]—is the systematic way in which lenders are repaid in case of bankruptcy or liquidation.
Answer
seniority ranking
Tags
#fixed #income
Question
[...]—is the systematic way in which lenders are repaid in case of bankruptcy or liquidation.
Answer
?
Tags
#fixed #income
Question
[...]—is the systematic way in which lenders are repaid in case of bankruptcy or liquidation.
Answer
seniority ranking
If you want to change selection, open original toplevel document below and click on "Move attachment"
Parent (intermediate) annotation
Open it seniority ranking—that is, the systematic way in which lenders are repaid in case of bankruptcy or liquidation.
Original toplevel document
Asset or Collateral Backing aim on the issuer’s assets and cash flows. Thus, unsecured bonds are paid after secured bonds in the event of default. By lowering credit risk, collateral backing increases the bond issue’s credit quality and decreases its yield.
<span>A bond’s collateral backing might not specify an identifiable asset but instead may be described as the “general plant and infrastructure” of the issuer. In such cases, investors rely on seniority ranking—that is, the systematic way in which lenders are repaid in case of bankruptcy or liquidation. What matters to investors is where they rank compared with other creditors rather than whether there is an asset of sufficient quality and value in place to cover their claims. Senior debt is debt that has a priority claim over subordinated debt or junior debt. Financial institutions issue a large volume of both senior unsecured and subordinated bonds globally; it is not uncommon to see large as well as smaller banks issue such bonds. For example, in 2012, banks as diverse as Royal Bank of Scotland in the United Kingdom and Prime Bank in Bangladesh issued senior unsecured bonds to institutional investors.
Debentures are a type of bond that can be secured or unsecured. In many jurisdictions, debentures are unsecured bonds, with no collateral backing assigned to the bondholders. In contras
Summary
status
not learned
measured difficulty
37% [default]
last interval [days]
repetition number in this series
0
memorised on
scheduled repetition
scheduled repetition interval
last repetition or drill
Details
No repetitions
Discussion
Do you want to join discussion? Click here to log in or create user.