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Finance Glossary

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Subordinated Debenture


A corporate bond that is lower in priority—i.e., subordinated—to other debt that the company has incurred. Typically, large companies have many series of debt. Comcast, for example, has had over two dozen different layers of debt in its history. The lowest rated bonds in that stack get paid off after all of the more senior bonds are paid. Hence, the nomenclature as "subordinated."