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Subordinated

In the context of securitization, said of a tranche of securities issued by a special purpose entity that carries a higher risk than non-subordinated securities so that in the event of delinquencies in the payments to be received from the transferred receivables, subordinated security holders will absorb the losses while non-subordinated security holders will continue to receive the payments provided for at the time of issue.

The term is also used to designate a debt instrument that, in the event of liquidation, takes a lower priority to senior securities.