Senior Bonds: Senior Bonds are debt bonds that are depenedent on the issuers Capital Stack Rank (Primary Capital/loan acquired by the issuer, Subordinate Capital acquired by the issuer, Capital acquired through Equity). In case of liquidation/Financial Distress the issuer has to clear the debt capital acuired from the Senior Bonds first. These are genrally considered as low risk, low returns bonds as compared to the Subordinate Bonds.

Subordinate/Junior Bonds:

Subordinate bonds generally ranked after the Senior Bonds are paid off after the Senior Bonds investor are paid off. Subordinate/Junior Bonds in generally have a higher risk and also have higher returns in comparison to Senior Bonds.

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