subordinate bond

subordinate bond definition - finance
A bond whose claim on income and assets of the issuer in the event of default or if the issuer files for bankruptcy is ranked below the claims of other bondholders. A subordinate bond is paid after other bonds are paid off in the event of a default. Also called subordinate debenture.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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