Commentary

56 The junior debt

BANKING vol 4(1)
| Commentary

56 The junior debt

| Commentary

56 The junior debt

As regards the definition of the junior debt, if the junior debt arises under a specific loan agreement then a definition similar to that contained above for the senior debt would be appropriate. Sometimes in rescue or work out situations ‘junior non-financial indebtedness’ debt is defined as the debt arising before the date of the work out but to encourage suppliers, for instance, to continue supplying their goods or services, debts owed to them in respect of goods and services supplied after the date of the rescue or work out are given priority over other debts.

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