Trade uncertainty: Explore resources and tools for your business.

Trade uncertainty: Explore resources and tools for your business.

Definition

Senior debt

Senior debts are loans secured by collateral (assets) that must be paid off before any other debts when a company goes into default. The lender in this case is paid out of the sale of the company’s assets in priority sequence.

Their priority position makes senior debts less risky for lenders. As a result, the interest rates and repayment terms for senior debt tend to be more favourable than junior debt, that only has a secondary claim on company assets.

Didn’t find what you were looking for? Back to glossary