Subordination Agreement: Definition, Importance, and Example

Subordination Agreement: Definition, Importance, and Example

What Is a Subordination Agreement? A subordination agreement is a legal document that establishes one debt as ranking behind another in priority for collecting repayment from a debtor. The priority of debts can become extremely important when a debtor defaults on payments or declares bankruptcy. A subordination agreement acknowledges that one party’s claim or interest

Subprime

Subprime

What Is Subprime? Subprime is a below-average credit classification of borrowers with a tarnished or limited credit history, and which are subject to higher than average interest rates. Lenders will use a credit scoring system to determine which loans a borrower may qualify for. Subprime loans carry more credit risk, and as such, will carry

Subprime Market Definition

Subprime Market Definition

The Subprime Market: An Overview The subprime market is the segment of the financing business that relates to loans made to people or businesses who pose a greater risk of default because of their poor credit history or limited resources. Subprime simply means below prime or less than ideal. Unscrupulous behavior in the subprime market

Subprime Borrower Definition

Subprime Borrower Definition

What Is a Subprime Borrower? A subprime borrower is a person considered to be a relatively high credit risk for a lender. Subprime borrowers have lower credit scores and are likely to have multiple negative factors in their credit reports, such as delinquencies and account rejections. Subprime borrowers may also have a “thin” credit history

Stripped Yield

Stripped Yield

What Is a Stripped Yield? Stripped yield is a measure of the non-collateralized, independent return of a bond or warrant after all the monetary incentives and features have been removed. Stripped yields measures the return on only the debt portion of a bond or warrant, and so removes the impact of any embedded options, or