Senior anything is higher in priority than Junior. So the same applies to a bank loan.
Example:
Your fine glassware with swear words etched on it lovingly by craftsmen from Europe borrowed a total of $80 million, $50 million in Senior bank loans, and $30 million in Junior bank loans. Shockingly, the company goes belly up and, at auction, all of its assets get $60 million in bids. The Senior bank loans gets $50 million and the Junior bank loans get $10 million.
Yes, it's good to be senior. Ask AARP.
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Finance: What are Junior and Senior Debt...7 Views
Finance a la shmoop what are senior and junior debt? or like what's the
difference between them well what are they they're debt in a bankruptcy senior
debt collects what they're owed ahead of junior debt shockingly yep laws of the [Debt transferring to senior debt]
jungle remember the debt stack? vendors to the
company collect first then employees then the IRS of course because while
they always have their hands up in your bidness [Woman flips over stack of papers on womans desk]
then come senior bonds then come junior then come unsecured bonds also known as
debentures then subordinated debenture like debentures below debentures and
there are all kinds of granular things in the bonds above we're very sorry if
one day in your career you have to care about all of this okay then moving down [Man discussing debt stack]
the stack then there's preferred stock which collects after the most
subordinated debentures collect generally and then finally there's
common stock and well really finally then there's death and well in taxes [Uncle Sam appears at grave stone]
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