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Topic: Debt seniority

	Subordination of Debt in France
		A debt subordination agreement is a contract in which a junior creditor agrees that its claims against a debtor will not be paid until all senior indebtedness of the debtor is repaid.
		Under a conditional debt forgiveness agreement, a creditor may voluntarily undertake not to enforce its right of payment against the debtor as long as debts owing to other creditors are due and outstanding.
		If the agreement for the sale of seniority effects specific subordination of HC's claim to that of Senior, as opposed to general subordination to all of OC's creditors, Junior, while subordinated to Senior, would be in a better position than that depicted in Figure 3, where HC advanced equity to OC.
	www.ffhsj.com /cmemos/020618_sub_debt_fran.htm (2131 words)

	Credit default swap - Wikipedia, the free encyclopedia
		Another factor that affects the quote on a CDS contract is the debt seniority of the reference obligation.
		In the event of a company becoming bankrupt bonds that are issued as senior debt are more likely to be paid back than bonds issued as subordinated, or junior debt, hence junior debt trades at a greater credit spread than senior debt.
		If Risky Corporation defaults on its debt 3 years into the CDS contract then the premium payments would stop and Derivative Bank would ensure that the pension fund is refunded for its loss of 10 million euros.
	www.wikipedia.org /wiki/Credit+default+swap (702 words)

	Deutschlands Krise und Konjunktur, 1924-1934: Binnenkonjuktur, Auslandsverschuldung und Reparationsproblem zwischen ...
		The "big idea" is that a change in the seniority of debt, agreed as part of the renegotiation of Germany's reparations debts, shut off access to foreign funds when they were needed most -- after 1929, when the country had entered into a severe recession and was about to plunge even further.
		There is some archival evidence that suggests that Germany was keen to pile the non-reparation debt high in order to leave the allies dry, such as an incriminating internal document from the Foreign Office in Berlin.
		If the seniority clause was as important as the author claims, then it evidently took contemporaries at least eighteen months to figure this out; and by the time they allegedly did, there were plenty of other reasons not to lend.
	www.eh.net /bookreviews/library/0601.shtml (2479 words)

	Emerging Market Debt. What is the Problem? Speech by Kenneth Rogoff, Economic Counselor and Director, Research ...
		Without an explicit seniority structure, there is an incentive for investors to look for forms of debt that are the hardest to restructure (such as short-term debt), a subject explored in a recent paper by Patrick Bolton and Olivier Jeanne of the IMF Research Department.
		Instead, they focus on mitigating the costs of debt crises and debt restructuring for both sides, but particularly for the debtor, by reducing the collective action problems that are at the heart of these costs.
		Thus, the restructuring of both types of debt will be closely related, and domestic debt restructuring may gain in transparency and equity from the existences of a well-established mechanism for external debt.
	www.imf.org /external/np/speeches/2003/012203a.htm (1586 words)

	Seniority: A frugal generation finding itself in debt
		Of all generations, this was the one that got it right by pinching pennies, avoiding credit and putting money away for retirement and to pass on to their children.
		And because seniors are proud and protective of their independence, they often try to hide their financial distress from their families.
		A separate study by Demos, a New York think tank, found that seniors older than 65 were carrying an average of $4,041 in credit card debt in 2001, nearly double the amount reported by seniors 10 years earlier.
	www.stpetersburgtimes.com /2004/10/26/Seniority/A_frugal_generation_f.shtml (900 words)

	libertarianism: What To Do About Debt
		Debt Management companies place your payments to them in escrow and STOP paying your creditors, hoping to settle on the debts for a lower amount.
		Involuntary debt is different (I'm talking about debt you incur by accident or without your knowledge, not debt you incur instead of dying).
		Debt is bad, and I try to avoid it as much as possible.
	www.livejournal.com /community/libertarianism/994582.html (3384 words)

	Equal Justice Works: (Site not responding. Last check: 2007-10-16)
		The significant challenges such large educational debt burdens present to graduating law students are best understood when viewed in the context of the striking gaps between salaries for attorneys in private practice and those in public service.
		In the real world of servicing debt and meeting basic living expenses, the impact of low salaries and high debt burdens is significant.
		Based on a median debt level of $84,400 for law school expenses, debt service payments are approximately $950 per month.
	www.equaljusticeworks.org /choose/lrapsurvey6.php (674 words)

	Michigan in the News—Stephen M. Ross School of Business (Site not responding. Last check: 2007-10-16)
		In a new study, Sreedhar Bharath of the University of Michigan Business School and colleagues Viral Acharya of the London Business School and Anand Srinivasan of the University of Georgia conclude that the financial condition of the industry of the defaulting firm is an economically important determinant of recovery rates, outweighing other factors.
		The seniority and security of debt instruments help to account for some variation in recovery rates at emergence, according to the study.
		¿Seniority and collateral, time in default, concentration of debt structure, industry distress and industry liquidity are factors that seem to affect recoveries over and above factors that affect default risk,¿ Bharath says.
	www.bus.umich.edu /NewsRoom/ArticleDisplay.asp?news_id=1785 (697 words)

	Mayer, Brown, Rowe & Maw LLP \| CDO (Site not responding. Last check: 2007-10-16)
		Collateralized debt obligations (CDOs) and its more specific siblings, collateralized bond obligations (CBOs) and collateralized loan obligations (CLOs), are a successful application of sophisticated securitization techniques originally developed for collateralized mortgage-backed securities (CMBS) to facilitate the resolution of the Savings and Loan crisis in the US in the 1980s.
		Additionally, commercial banks and other originators of project finance debt can have their project finance portfolios "shadow" rated in a process in which the rating agency will "map" the rating system of such originator to its own rating system and determine its rating of a particular project finance debt obligation by application of such mapping.
		Generally, commercial banks are experienced and capable originators of project finance debt and have a competitive advantage over other financial institutions in their ability to provide flexible funding for a project's precommercial development, including construction during which draws may be accelerated or delayed.
	www.mayerbrownrowe.com /cdo/news/cdowww.asp (1613 words)

	debt to income ratio :: Online Help Center (Site not responding. Last check: 2007-10-16)
		Therefore, we recommend a new cash auction for an incentive contract.The theory explains (i) why debt contracts are prioritized, (ii) why short-term debt is senior to long-term debt, and (iii) why financial intermediaries usually hold short-term senior debt whereas long-term junior debt is widely held.
		Another implication of the theory is that covenant and maturity structures will be se t to conform to the seniority structure.A debt collector is any person, other than the creditor, who regularly collects debts owed to others.
		These precious debt to income ratio listings will guild you to the right information source.We find that government exams do produce new, valu e-relevant information; that debenture prices do not immediately reflect this information; and that the market prices the likely regulatory actions implied by this information.
	www.aloanpros.com /debt/debt_to_income_ratio.html (236 words)

	Re: 2nd mortgage rights after the sheriff's sale
		While it is true that the debt is no longer secured by the property because the lien was "wiped off" of the title, the foreclosure did not actually extinguish the debt (hint: only bankruptcy can discharge the debt).
		If the overbid runs out before all junior lienors are paid, mom should consider using some of that returned surplus to cover those debts (have her negotiate a reduced pay off, of course...say, 10 cents on the dollar).
		If daughter's credit is toast and she has quite a bit of accumulated debt, she may want to consider bankruptcy to wipe the slate clean before mom assists her with that surplus.
	www.all-foreclosure.com /forum/messages/12993.html (1704 words)

	Financial Management (Financial Management Association): The administrative costs of debt restructurings: some recent ...
		Jensen (1991) argues that one advantage of the LBO organizational form is that the creditors' coordination problem is reduced, because investors often hold claims across seniority classes (e.g., senior debt, junior debt, and equity).
		A more charitable view holds that by consolidating large blocks of debt, vulture investors facilitate restructurings by reducing the number of claimholders, thus reducing the creditors' coordination problem.(3) Evidence that direct costs are higher (lower) in cases involving vulture investors would support the first (second) point of view.
		Finally, large debt restructurings during this period typically involve informal bondholder committees that form as a result of debt defaults.
	www.findarticles.com /p/articles/mi_m4130/is_n4_v26/ai_20293944 (1408 words)

	Jubilee Research: Economist Offers Support For International Bankruptcy Procedure (Site not responding. Last check: 2007-10-16)
		In the debt crisis of the 1980s, when the governments of developing countries owed debts mainly to banks, creditors were corralled around a table by the IMF and cajoled into accepting roll-overs and, eventually, debt reduction.
		In cases where bank debt is the chief concern (eg, South Korea in 1997), creditors have been pushed into providing more cash, with the same sort of arm-twisting as in the 1980s.
		The appeal of sovereign bankruptcy is that it may eliminate the need for huge IMF bail-outs, with their attendant risk of inciting reckless lending, and at the same time avoid the legal morass of unilateral default.
	www.jubilee2000uk.org /analysis/articles/economist_support.htm (870 words)

	Turnaround Management - Anderson Bauman Tourtellot Vos & Co:
		Retaining the most senior employees may be the best defense to potential claims of age discrimination.
		However, because the less senior employees in a work force may disproportionately consist of women and minorities, the employer should be careful that the use of seniority does not have a disparate impact upon these groups.
		While the use of seniority limits legal concerns, it may not result in the retention of the most skilled employees.
	www.abtv.com /lib11.htm (3484 words)

	Defaulted Bond Returns
		The general class of defaulted bonds is subdivided according to seniority within the capital structure, which determines liquidation preference, or priority of claim in bankruptcy.1 To value individual issues, investors must take into account the ordinary expectation that the percentage of claim recovered will decline with each step down the priority scale.
		For the 51 senior debt issues, we find that the time elapsed between default and emergence has a meaningful correlation (R) of —0.42 with the payoff on emergence.
		The incentive for senior unsecured holders to make concessions is even greater when, as is typically the case, the subordinated class represents a decided minority of the capital structure.
	www.bradynet.com /bbs/globalbonds/100033-0.html (3756 words)

	debt job in Yorkshire - Michael Page Recruitment - debt job in Yorkshire (Site not responding. Last check: 2007-10-16)
		Our client is looking to expand its activities in the UK by recruiting a number of senior property finance originators in regional centres through the UK and Ireland.
		Our client is seeking an experienced Debt Recovery specialist to fill the position of Debt Recovery Manager within their Leeds city centre office.
		Reporting into the Senior Auditor you will be responsible for ensuring the completion and reporting of audits on existing clients, surveys on prospective clients and bank health checks with recommend...
	banking.michaelpage-recruitment.com /debt-job-in-yorkshire (191 words)

	Center for Private Equity and Entrepreneurship: Private Equity Glossary
		— debt that has seniority in case the borrowing company defaults or is dissolved and its assets sold to pay creditors.
		— debt which does not have any priority in case of dissolution of the company and sale of its assets.
		This average is determined using weight factors based on the ratio of equity to debt plus equity and the ratio of debt to debt plus equity.
	mba.tuck.dartmouth.edu /pecenter/resources/glossary_s_z.html (1401 words)

	Unions set Air Canada flight attendants against each other
		The airline is saddled with a total debt of some $12.8 billion and faces upcoming debt payments of $400 million in the third quarter of 2003.
		The contentious seniority formula, which was designed and imposed by a CUPE-appointed arbitrator, assigns seniority to flight attendants not based on their years of service at Air Canada and the now defunct Canadian Airlines, but rather on the basis of their relative seniority at their pre-merger employer.
		The divisive seniority system is a logical extension of the policy pursued by CUPE and the other airline unions in the corporate war that preceded the merger.
	www.wsws.org /articles/2003/jan2003/acan-j28_prn.shtml (1415 words)

	Daily Mirror Online (Site not responding. Last check: 2007-10-16)
		She has achieved seniority in the said department and was promoted as Asst.
		She contends that she is entitled to and in fact should have received more marks than Jayasekera on the basis of seniority and that the said interview board had erroneously or wrongfully or unlawfully interpreted the working scheme of July 30.
		The Embassy commenting on the issue said the debt swap program under the TFCA was a perfectly positive, innocuous, noble program and added that it was up to the Sri Lanka government to participate.
	www.dailymirror.lk /2002/11/18/News/1.html (2017 words)

	BALANCED BUDGET (Site not responding. Last check: 2007-10-16)
		This notion also increases our national debt, since the only place to get more of those less-valuable dollars is to borrow them from the Fed. The worker’s buying power does not increase; he is not being given a real raise.
		His debt to the bank (his share of the deficit) does increase, however, and he must pay it with his real time.
		The deadwood and the greedy will depart to the private sector instantly, leaving only those remaining whose reason to be there is to responsibly administer the necessities of government.
	www.zianet.com /postpubco/thtbudg.htm (513 words)

	Manfred Balz - Issues Note
		In a sovereign context, it suffices to include those important creditor classes that control a bottleneck for the coming about of an overall debt adjustment, i.a., whose joint action is key to restoring the sustainability of overall debt.
		One conceivable approach could be to allow a creditors' committee acting with appropriate majority, and under the control of the Sovereign Debt Dispute Resolution Forum ("DRF"), to determine flexibly the necessary degree of seniority over impaired eligible claims for fresh credit.
		Differing maturities and interest rates could be expressed by adjusting the admissible (allowable) amount of eligible non-mature claims with different yield structures to their net present value (admitting/allowing, so to speak, the hypothetical or real trading value of debt, instead of nominal amounts)9).
	www.inwent.org /ef-texte/sdrm/balz.htm (1605 words)

	Vanderbilt Capital Advisors
		Collateralized Investment Obligations (Vanderbilt Capital Advisors’ designation for investment grade collateralized debt obligations) are investment vehicles that raise capital from the issuance of debt and equity in order to invest in a diversified portfolio of fixed income securities.
		Debt liabilities are issued in a sequential structure with rated bonds from AAA to BBB depending on the seniority of the bond, investor appetite, collateral composition and rating agency guidelines.
		Overcollateralization Tests: in order to protect senior investors in a CIO, overcollateralization (portfolio assets + principal repayments/debt) and interest coverage (portfolio interest income/interest expense) test covenants are constructed so that the portfolio meets a minimum specified level of cushion for specified classes.
	www.vcallc.com /mailings/additions/cio.htm (1636 words)

	[No title]
		The purpose of Chapter 14 is to acquaint the student with the sources of long term financing: common stock, preferred stock, and long term debt.
		19. The thee distinctive features of debt are: debt does not represent an __________, interest paid is __________, and unpaid debt is a __________ of the firm.
		Such debt is said to be __________ and the price the corporation must pay is called the __________.
	www.keele.ac.uk /depts/ec/l_symons/Econ321/ch14rwj.htm (1869 words)

	Risk magazine - Technical papers
		For one thing, the record levels of default in 2001 and 2002 mean there is a lot of defaulted debt being traded in the market; such debt is largely a bet on recovery rates.
		Second, recovery rates are more volatile for senior debt than for subordinated debt categories, showing more systematic dependence than even default probability itself.
		That will be a useful result for distressed debt investors, but may prove over-complex for credit portfolio managers.
	db.riskwaters.com /public/showPage.html?page=15000 (774 words)

	Wilmott Forums - Debt valuation (Site not responding. Last check: 2007-10-16)
		When people like KMV put in half the ST debt, this is mostly an empirical fudge factor, because the commercial paper is a different animal from the unsecured bonds.
		Unfortunately, this means that the model you use for junk debt should not be the model you use for AA debt, even though the AA debt may become junk some day.
		I have to admit that data on debt structure will be very thin, but even then there will be a difference between the value of pension liabilities vs long term debt (Difference in Maturity and yield?).
	www.wilmott.com /messageview.cfm?catid=4&threadid=4338 (1614 words)

	seniority
		More Financial Pages seniority currency option triple witching hour vami banking software...
		book semistrong form efficiency send it in senior debt seniority senior mortgage bond senior refunding senior security sensitive...
		May or may not have seniority over preference stock (which is akin to preferred...
	www.mcclproject.org /money/seniority (159 words)

	SSRN-Capital Structure and Managerial Compensation: The Effects of Remuneration Seniority by Riccardo Calcagno, Luc ... (Site not responding. Last check: 2007-10-16)
		We show that the relative seniority of debt and managerial compensation has important implications on the design of remuneration contracts.
		Whereas the traditional literature assumes that debt is senior to remuneration, we show that this is frequently not the case according to bankruptcy regulation and as observed in practice.
		The empirical findings are in line with the regime of remuneration seniority as the base salary is significantly higher and the performance bonus is lower in financially distressed firms.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=249040 (298 words)

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