Senior Debt
Short definition
Senior debt is the layer at the front of collateral and the payment waterfall in default. Bank term loans and RCFs usually sit here; the lowest coupon and tightest covenants sit here too.
Detailed explanation
Senior secured cuts LGD. Several creditors on the same rank share pari passu.
CFADS goes to senior service first. Junior and mezzanine cannot jump that waterfall. A covenant breach gives seniors acceleration first.
Why it matters for the CFO
Debt capacity fills first on senior DSCR and collateral. Then junior, then equity.
How to read it
Senior all-in looks “cheapest”; covenant and collateral flexibility is the price.
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What to learn next
Definitions are educational. They are not investment, credit or tax advice.