subordinated debenture

finance

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July 14, 2026

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A subordinated debenture is a type of bond that is secondary to all other debentures and short-term bank loans in terms of reclaiming capital during a business liquidation. Unlike debentures secured by specific assets, subordinated debentures rely on the company's strong credit standing or its commitment to policies that ensure high earnings.12

In finance, a debenture is a loan contract issued by a company or public body. It outlines the obligation to repay borrowed funds and pay interest, often secured by the company's property. Investors receive certificates with interest coupons. If the issuer defaults, debenture holders can appoint a receiver to seize assets and recover their investment.2

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business finance
Long-term debt
…more junior lien is the subordinated debenture, which is secondary (in terms of ability to reclaim capital in the event of a business liquidation) to all other debentures and specifically to short-term bank loans.
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…more junior lien is the subordinated debenture, which is secondary (in terms of ability to reclaim capital in the event of a business liquidation) to all other debentures and specifically to short-term bank loans.
Read More