Jurisdiction(s):
United Kingdom

Key definition

Junior debt definition

What does Junior debt mean? In practice, junior debt is borrowing that, by agreement (contractual subordination) or by structure (structural subordination), ranks behind senior debt for payment, enforcement and recoveries. It is a market term rather than a statutory definition; priority is set by the security package and by subordination provisions in intercreditor or subordination agreements. Typical features include payment blockages, turnover of recoveries, enforcement standstills, limits on junior recoveries, and second‑ranking (second‑lien) or unsecured status. Common forms are subordinated notes, mezzanine finance, vendor loans and shareholder loans, often with higher pricing or payment‑in‑kind interest to reflect increased risk. On insolvency or restructuring (administration, liquidation,...

European leveraged finance intercreditor rights: comparative table—mezzanine, second lien and senior subordinated notes

Published by a LexisNexis Banking & Finance expert

Practice notes

This table

provides a concise overview of typical negotiated outcomes across a range of intercreditor topics, flagging the principal areas where junior creditors’ rights converge or diverge depending on the junior debt instrument;
is drawn from documentation in the upper mid‑market and large capitalisation segments of the European leveraged finance market;
assumes a second lien facility is documented separately from the senior debt and votes as an independent creditor class.

Intercreditor rights may differ because of (among other factors):

transaction‑specific structural features;
whether the debt is distributed in Europe or the US;
documentary requirements of particular investors (especially where junior debt is pre‑placed); and
whether a junior creditor has actively negotiated its rights, or they appear in an evergreen intercreditor agreed solely between the sponsor and senior creditors.

For further detail on the topics covered in this table, see Practice Notes:

Introductory guide to Intercreditor Agreements
Intercreditor agreements—effective releases

Mezzanine facility
Second lien facility
Senior subordinated notes

Structure and ranking

Which entity(ies) in the transaction structure borrow the junior debt? Typically, only the Company (assumed to be the main borrower of the...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Neil Grant

Neil is a consultant solicitor with over twelve years' experience representing lenders on the origination and distribution of a wide range of event-driven finance transactions, including debt facilities backing private equity sponsored acquisitions, corporate acquisitions, IPOs, high yield bond bridges and real estate investments. Neil is an alumnus of Allen & Overy and has held in-house roles at Credit Suisse, Mizuho Bank and Barclays Capital....

Web page updated on 21/05/2026

Popular documents

Using the Judicial College Guidelines to assess general damages in personal injury claims

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Tomlin orders in England and Wales: CPR guidance on drafting, confidentiality, approval, variation, enforcement, limitation, CCA issues, court-specific requirements, sample wording and precedents

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Precedent: Deed of Surrender of Lease with Optional Premium, Settlement and Release, Landlord, Mortgagee and Guarantor Consents, Reimbursement and HM Land Registry Provisions (England and Wales)

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Precedent Statutory Declaration: Standard Wording under the Statutory Declarations Act 1835

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...