Senior debt, Subordinated debt, Perpetual

See Chapters 27 and 44 of the Vernimmen

Senior debt is the debt held by creditors with either a security claim or a priority claim on repayment of the principal and the interest. Senior debt is also one of the types of debts used in LBO transactions.


See Chapters 27 and 44 of the Vernimmen

Subordinated debt is the debt repaid after the claims of the other creditors, in particular the senior creditors, have been settled. Subordinated debt is also called junior debt.

French equivalent: Titres subordonnés à durée indéterminée (TSDI)


See Chapter 7 of the Vernimmen

Perpetual subordinated loans and notes are never redeemable and thus continue to pay interest as long as the borrower remains solvent (see solvency). They have no duration because there is no contractual undertaking for repayment, which may take place when the issuer so wishes. If the issuer is liquidated, noteholders rank for repayment after other creditors (as they are subordinated debts) but before shareholders.
Perpetual subordinated loans and notes are also called perpetuals.

French equivalent: Titres Super Subordonnés (TSS)