seniority

Seniority describes the seniority of the issuance in the cap table. A senior security ranks highest in a companies liquidation schedule and hence considered the safest form of debt. subordinated debt ranks below senior debt, and is therefore considered less safe and first loss specifically refers to the least safe debt, just before equity holders.

A secured security is one whose cash flows or credit worthiness is backed by another asset.

├── senior_secured
├── senior_unsecured
├── subordinated_unsecured
│   └── mezzanine
├── subordinated_secured
├── first_loss_secured
└── pari_passu

first_loss_secured

“first loss tranche” means the most subordinated tranche in a securitisation that is the first tranche to bear losses incurred on the securitised exposures and thereby provides protection to the second loss and, where relevant, higher ranking tranches.

mezzanine

Represents a hybrid instrument that embodies both flexibility and risk. It fills the gap between senior debt, which tends to be more conservative and prioritized in repayment, and equity financing, which often involves ownership dilution through the issuance of shares.

pari_passu

Describes situations in which two or more assets, securities, creditors, or obligations are treated equally, without preference or priority.

senior_secured

Security that is both senior and secured.

senior_unsecured

Security that is both senior and unsecured.

subordinated_secured

Security that is both subordinated and secured.

subordinated_unsecured

Security that is both subordinated and unsecured.