Terms of a security indicating that, in the event of financial distress, principal and interest are paid only after claims of other security holders are settled.

A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt.

Junior in priority of claim.

Applied to a bond whose claim on assets and earnings has a lower priority than other debt.

subordinated debt subrogate

Subordinated debt, also known as junior debt, is a finance term to describe debt that is unsecured or has a lesser priority than that of an additional debt claim on the same asset. This means that if the party that issued the debt defaults on it, people holding subordinated debt get paid after the holders of the "senior debt". A subordinated debt therefore carries more risk than a normal debt.