Junior Debt
/ˈdʒuːniər dɛt/
Definitions
- (n.) A class of debt that ranks below senior debt in priority for repayment in the event of a borrower's default or liquidation.
In the bankruptcy proceedings, junior debt holders were paid only after all senior debt had been satisfied.
Related terms
Commentary
Junior debt typically carries higher risk and interest rates due to its subordinate position; clear drafting of debt priority in loan agreements is essential to prevent disputes.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.