Table of Contents
A senior security is one that ranks higher in terms of payout ranking, ahead of more junior or subordinate debt. Secured and senior debt is paid first, in the event a company runs into financial trouble. Junior debt, then preferred shareholders, and finally common shareholders are paid out last.
What is a senior secured bonds?
Senior Secured Bond means a debt security (that is not a loan) that is (a) issued by a corporation, limited liability company, partnership or trust and (b) secured by a valid first priority perfected security interest on specified collateral.
What is a senior secured note?
Senior Secured Notes means secured or unsecured notes or other debt of the Company issued after the Closing Date, and the Indebtedness represented thereby; provided that (a) the terms of which do not provide for any scheduled repayment, mandatory redemption or sinking fund obligations prior to the Latest Maturity Date.
What does senior unsecured bond mean?
Senior Unsecured Bond means any unsecured debt security (that is not a Bank Loan) that is not subordinated to any other unsecured indebtedness of the related issuer, provided that a debt security that would otherwise be a Senior Unsecured Bond shall not be a Senior Unsecured Bond if the obligor of such debt security is.
Why is preferred stock viewed as a senior corporate security?
Preferred stock is classified as senior to common stock, since the holders of preferred stock are paid before the holders of common stock. A guaranteed bond can be considered a senior security, since repayment of it is guaranteed by a third party.
Are bonds senior debt?
Loans and bonds can be issued as senior debt or subordinated debt. Senior debt is repaid first if the borrower encounters a default or liquidation. It is usually secured debt with collateral; however, it can also be unsecured with specific provisions for repayment seniority.
Is first lien the same as senior secured?
Lien for the benefit that the First Lien Collateral Agent and the money Senior Secured Parties as security for no Senior Obligations.
Why would a company redeem senior notes?
A senior note is a type of bond that gives an investor a higher-priority claim compared to junior notes when a company files bankruptcy. Senior notes pay lower interest rates than junior notes but are repaid before other debts when a company defaults.
Why would a company issue senior notes?
Why Do Companies Offer Convertible Senior Notes? Convertible notes and convertible senior notes are a popular way for companies to borrow money with lower interest obligations than other kinds of debt. When note-holders redeem their notes for company shares, they reduce the company’s debt obligations.
Are convertible senior notes good or bad?
Convertible notes are good for quickly closing a Seed round. They’re great for getting buy in from your first investors, especially when you have a tough time pricing your company. If you need the cash to get you to a Series A that will attract a solid lead investor at a fair price, a convertible note can help.
What is Warrant security?
Warrants are a contract that gives the right, but not the duty, to buy or sell a security—most usually, equity—before expiry at a certain amount. Warrants giving the right to buy a security are referred to as call warrants; those giving the right to sell a security are known as put warrants.
What are fixed income senior securities?
A senior security is one that ranks higher in terms of payout ranking, ahead of more junior or subordinate debt. Secured and senior debt is paid first, in the event a company runs into financial trouble. Junior debt, then preferred shareholders, and finally common shareholders are paid out last.
Can unsecured debt be senior?
Senior Unsecured Debt means indebtedness for borrowed money that is not subordinated to any other indebtedness for borrowed money and is not secured or supported by a guarantee, letter of credit or other form of credit enhancement.
What is the senior security alliance?
Senior Security Alliance is a program of The Citizen’s Assembly, a grassroots nonprofit organization. We’re devoted to working with Congress to secure the Social Security benefits of America’s retirees and protect the financial stability of our seniors. Some call our benefits an “entitlement.” We say they’re EARNED.
What is senior capital?
Senior Capital means any and all Equity Securities, indebtedness or debt securities of the Company or any of its Subsidiaries (other than such issuances between or among the Company and its direct or indirect wholly-owned Subsidiaries), other than Common Shares (or Equity Securities convertible into or exercisable or.
What is senior equity?
Senior Equity Securities: any Equity Securities which, with respect to voting rights, dividend rights or rights on liquidation, dissolution, winding up or in any other respect, rank senior to, or have any other rights in preference of, the Ordinary Shares, now or hereafter authorized by the Company.
What is a super senior loan?
What is it? Labelled ‘first out’ in the US and ‘super senior’ in Europe, this is a revolving credit facility (RCF) which has priority over other pari passu debt in relation to the proceeds of enforcement of collateral and, in the US, guarantee recoveries.
What is senior leverage?
“Senior Leverage Ratio” shall mean the ratio of Senior Debt of the Parent and its Subsidiaries on a consolidated basis to EBITDA for the twelve (12) month period most recently ended.
Is term loan A senior debt?
In English law-governed loan transactions, TLBs are often referred to as mezzanine debt or subordinated debt. In US law-governed loan transactions, TLBs are senior debt and are usually not subordinated to other indebtedness of the borrower.
What type of lien has the most seniority?
Liens generally follow the “first in time, first in right” rule, which says that whichever lien is recorded first in the land records has higher priority than later recorded liens. For example, a mortgage has priority over a judgment lien if the lender records it before the judgment creditor records its lien.
Is second lien senior debt?
These debts have a lower priority of repayment than do other, senior, or higher-ranked debt. In other words, second-lien is second in line to be fully repaid in the case of the borrower’s insolvency. Only after all senior debt, such as loans and bonds, have been satisfied can second-lien debt be paid.
Which type of security is most likely to have the same rating as the issuer?
Which type of security is most likely to have the same rating as the issuer? C is correct. The issuer credit rating usually applies to its senior unsecured debt.
