22:
970:
960:
213:
that effectively renders that other instrument more likely to be repaid in an insolvency than unsecured senior debt. Lenders of a secured debt instrument (regardless of ranking) receive the benefit of the security for that instrument until they are repaid in full, without having to share the benefit
243:. However other debt claims, including unsecured senior debt, were not. By doing this, the Federal Deposit Insurance Corporation (FDIC) effectively subordinated the unsecured senior debt to depositors, thereby fully protecting depositors while also eliminating any potential
214:
of that security with any other lenders. If the value of the security is insufficient to repay the secured debt, the residual unpaid claim will rank according to its documentation (whether senior or otherwise), and will receive
374:
247:
liability to the FDIC itself. In this and similar cases, specific regulatory and oversight powers can lead to senior lenders being subordinated in potentially unexpected ways.
254:
bankruptcies, new lenders can come in to fund the continuing operation of companies and be granted status super-senior to other (even senior secured) lenders, so-called "
315:
Federal
Deposit Insurance Corporation (FDIC) Bank Acquisition Information for Washington Mutual Bank, Henderson, NV and Washington Mutual Bank, FSB, Park City, UT
270:
is in fact subordinated to any lenders (senior or otherwise) at a subsidiary with respect to access to the subsidiary's assets in a bankruptcy. The collapse of
367:
274:
bank in 2008 highlighted this priority of claim, as lenders to
Washington Mutual, Inc. received no benefit from the assets of that entity's bank subsidiaries.
291:
360:
126:
is debt that takes priority over other unsecured or otherwise more "junior" debt owed by an issuer. Senior debt is frequently issued in the form of
239:
seizure, all assets and most of
Washington Mutual Bank's liabilities (including deposits, covered bonds, and other secured debt) were assumed by
209:
Notwithstanding the senior status of a loan or other debt instrument, another debt instrument (whether senior or otherwise) may benefit from
86:
261:
58:
326:
226:
Senior lenders are theoretically (and usually) in the best position because they have first claim to unsecured assets.
105:
841:
65:
754:
43:
900:
72:
694:
39:
418:
811:
54:
774:
314:
193:
945:
930:
920:
759:
574:
994:
963:
940:
878:
704:
629:
589:
569:
674:
664:
634:
604:
544:
32:
915:
816:
679:
517:
487:
831:
135:
853:
848:
352:
262:"Senior" debt at holding company is structurally subordinated to all debt at the subsidiary
255:
154:
229:
However, in various jurisdictions and circumstances, nominally "senior" debt may not rank
8:
803:
79:
973:
885:
868:
826:
749:
741:
527:
512:
387:
150:, senior debt theoretically must be repaid before other creditors receive any payment.
910:
905:
890:
821:
764:
709:
684:
654:
644:
554:
537:
458:
453:
413:
408:
395:
383:
347:
271:
244:
236:
210:
204:
143:
139:
863:
858:
769:
724:
624:
522:
443:
428:
403:
174:
925:
836:
789:
779:
714:
639:
609:
559:
507:
479:
423:
331:
267:
873:
784:
240:
185:
196:
over other classes of debt and over all classes of equity by the same issuer.
999:
988:
492:
731:
579:
564:
438:
689:
659:
502:
178:
170:
935:
895:
699:
649:
619:
497:
251:
231:
162:
147:
669:
532:
21:
719:
614:
599:
189:
205:
Secured parties may receive preference to unsecured senior lenders
549:
119:
166:
158:
448:
382:
235:
with all other senior obligations. For example, in the 2008
177:
lines. It is the debt that has priority for repayment in a
258:" status. Similar regimes exist in other jurisdictions.
327:
WaMu's Bank Split From
Holding Company, Sparing FDIC
218:treatment with other unsecured debts of such rank.
46:. Unsourced material may be challenged and removed.
986:
368:
199:
969:
959:
375:
361:
106:Learn how and when to remove this message
987:
221:
356:
44:adding citations to reliable sources
15:
13:
188:that has priority with respect to
14:
1011:
341:
968:
958:
153:Senior debt is often secured by
20:
146:. In the event the issuer goes
31:needs additional citations for
755:Debtor-in-possession financing
319:
308:
284:
165:. Usually this covers all the
1:
277:
695:Staggered board of directors
7:
812:Accretion/dilution analysis
10:
1016:
775:Leveraged recapitalization
134:. Senior debt has greater
954:
946:Valuation using multiples
931:Sum-of-the-parts analysis
901:Modigliani–Miller theorem
802:
760:Dividend recapitalization
740:
588:
575:Secondary market offering
478:
467:
394:
964:List of investment banks
879:Free cash flow to equity
705:Super-majority amendment
630:Management due diligence
570:Seasoned equity offering
325:Shen, Linda. 9-26-2008.
200:Limitations to seniority
675:Shareholder rights plan
665:Post-merger integration
635:Managerial entrenchment
605:Contingent value rights
545:Initial public offering
817:Adjusted present value
680:Special-purpose entity
518:Direct public offering
488:At-the-market offering
237:Washington Mutual Bank
173:and is often used for
832:Conglomerate discount
266:A senior lender to a
854:Economic value added
849:Discounted cash flow
256:debtor in possession
250:Additionally, in US
40:improve this article
439:Senior secured debt
222:Super-senior status
161:has put in place a
974:Outline of finance
886:Market value added
869:Financial modeling
827:Business valuation
750:Debt restructuring
528:Follow-on offering
513:Corporate spin-off
471:(terms/conditions)
388:investment banking
130:or referred to as
982:
981:
906:Net present value
891:Minority interest
822:Associate company
798:
797:
765:Financial sponsor
685:Special situation
655:Pre-emption right
645:Minority discount
555:Private placement
454:Subordinated debt
409:Exchangeable debt
396:Capital structure
384:Corporate finance
272:Washington Mutual
245:deposit insurance
184:It is a class of
144:subordinated debt
140:capital structure
116:
115:
108:
90:
1007:
972:
971:
962:
961:
864:Fairness opinion
859:Enterprise value
842:Weighted average
770:Leveraged buyout
625:Drag-along right
523:Equity carve-out
480:Equity offerings
476:
475:
472:
444:Shareholder loan
429:Second lien debt
424:Preferred equity
404:Convertible debt
377:
370:
363:
354:
353:
335:
323:
317:
312:
306:
305:
303:
302:
288:
175:revolving credit
138:in the issuer's
111:
104:
100:
97:
91:
89:
48:
24:
16:
1015:
1014:
1010:
1009:
1008:
1006:
1005:
1004:
995:Bonds (finance)
985:
984:
983:
978:
950:
926:Stock valuation
921:Residual income
837:Cost of capital
794:
790:Project finance
780:High-yield debt
736:
715:Tag-along right
640:Mandatory offer
610:Control premium
591:
584:
560:Public offering
508:Bought out deal
470:
469:
463:
390:
381:
344:
339:
338:
324:
320:
313:
309:
300:
298:
290:
289:
285:
280:
268:holding company
264:
224:
207:
202:
112:
101:
95:
92:
49:
47:
37:
25:
12:
11:
5:
1013:
1003:
1002:
997:
980:
979:
977:
976:
966:
955:
952:
951:
949:
948:
943:
941:Terminal value
938:
933:
928:
923:
918:
913:
908:
903:
898:
893:
888:
883:
882:
881:
874:Free cash flow
871:
866:
861:
856:
851:
846:
845:
844:
834:
829:
824:
819:
814:
808:
806:
800:
799:
796:
795:
793:
792:
787:
785:Private equity
782:
777:
772:
767:
762:
757:
752:
746:
744:
738:
737:
735:
734:
729:
728:
727:
717:
712:
707:
702:
697:
692:
687:
682:
677:
672:
667:
662:
657:
652:
647:
642:
637:
632:
627:
622:
617:
612:
607:
602:
596:
594:
586:
585:
583:
582:
577:
572:
567:
562:
557:
552:
547:
542:
541:
540:
530:
525:
520:
515:
510:
505:
500:
495:
490:
484:
482:
473:
465:
464:
462:
461:
456:
451:
446:
441:
436:
431:
426:
421:
416:
414:Mezzanine debt
411:
406:
400:
398:
392:
391:
380:
379:
372:
365:
357:
351:
350:
343:
342:External links
340:
337:
336:
332:Bloomberg News
318:
307:
282:
281:
279:
276:
263:
260:
241:JPMorgan Chase
223:
220:
206:
203:
201:
198:
186:corporate debt
114:
113:
28:
26:
19:
9:
6:
4:
3:
2:
1012:
1001:
998:
996:
993:
992:
990:
975:
967:
965:
957:
956:
953:
947:
944:
942:
939:
937:
934:
932:
929:
927:
924:
922:
919:
917:
914:
912:
909:
907:
904:
902:
899:
897:
894:
892:
889:
887:
884:
880:
877:
876:
875:
872:
870:
867:
865:
862:
860:
857:
855:
852:
850:
847:
843:
840:
839:
838:
835:
833:
830:
828:
825:
823:
820:
818:
815:
813:
810:
809:
807:
805:
801:
791:
788:
786:
783:
781:
778:
776:
773:
771:
768:
766:
763:
761:
758:
756:
753:
751:
748:
747:
745:
743:
739:
733:
730:
726:
723:
722:
721:
718:
716:
713:
711:
708:
706:
703:
701:
698:
696:
693:
691:
688:
686:
683:
681:
678:
676:
673:
671:
668:
666:
663:
661:
658:
656:
653:
651:
648:
646:
643:
641:
638:
636:
633:
631:
628:
626:
623:
621:
618:
616:
613:
611:
608:
606:
603:
601:
598:
597:
595:
593:
587:
581:
578:
576:
573:
571:
568:
566:
563:
561:
558:
556:
553:
551:
548:
546:
543:
539:
536:
535:
534:
531:
529:
526:
524:
521:
519:
516:
514:
511:
509:
506:
504:
501:
499:
496:
494:
493:Book building
491:
489:
486:
485:
483:
481:
477:
474:
466:
460:
457:
455:
452:
450:
447:
445:
442:
440:
437:
435:
432:
430:
427:
425:
422:
420:
417:
415:
412:
410:
407:
405:
402:
401:
399:
397:
393:
389:
385:
378:
373:
371:
366:
364:
359:
358:
355:
349:
346:
345:
334:
333:
328:
322:
316:
311:
297:
296:Practical Law
293:
292:"Senior debt"
287:
283:
275:
273:
269:
259:
257:
253:
248:
246:
242:
238:
234:
233:
227:
219:
217:
212:
197:
195:
191:
187:
182:
180:
176:
172:
168:
164:
160:
157:on which the
156:
151:
149:
145:
141:
137:
133:
129:
125:
121:
110:
107:
99:
88:
85:
81:
78:
74:
71:
67:
64:
60:
57: –
56:
55:"Senior debt"
52:
51:Find sources:
45:
41:
35:
34:
29:This article
27:
23:
18:
17:
916:Real options
732:Tender offer
592:acquisitions
580:Underwriting
565:Rights issue
468:Transactions
433:
330:
321:
310:
299:. Retrieved
295:
286:
265:
249:
230:
228:
225:
215:
208:
183:
152:
132:senior loans
131:
128:senior notes
127:
123:
117:
102:
93:
83:
76:
69:
62:
50:
38:Please help
33:verification
30:
690:Squeeze-out
660:Proxy fight
590:Mergers and
503:Bought deal
434:Senior debt
348:Senior debt
179:liquidation
171:corporation
124:senior debt
989:Categories
936:Tax shield
896:Mismarking
700:Stock swap
650:Pitch book
620:Divestment
498:Bookrunner
419:Pari passu
301:2023-11-25
278:References
252:Chapter 11
232:pari passu
163:first lien
155:collateral
96:March 2023
66:newspapers
911:Pure play
804:Valuation
670:Sell side
533:Greenshoe
194:principal
136:seniority
742:Leverage
720:Takeover
615:Demerger
600:Buy side
216:pro rata
211:security
190:interest
148:bankrupt
725:Reverse
710:Synergy
550:Pre-IPO
538:Reverse
459:Warrant
120:finance
80:scholar
167:assets
159:lender
82:
75:
68:
61:
53:
449:Stock
169:of a
142:than
87:JSTOR
73:books
1000:Debt
386:and
192:and
59:news
118:In
42:by
991::
329:.
294:.
181:.
122:,
376:e
369:t
362:v
304:.
109:)
103:(
98:)
94:(
84:·
77:·
70:·
63:·
36:.
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.
