underlying debt

underlying debt definition - business

underlying debt

  1. Debt of a municipal organization for which a higher municipal organization is at least partially responsible. For example, hospital authority debt may be guaranteed by a county such that the hospital debt is underlying the debt of the county. Compare overlapping debt.
  2. A first mortgage on real estate when the same property is being used as collateral for other debt. For example, a first mortgage is the underlying debt when a home equity loan on the same property is also outstanding. Also called underlying mortgage.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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