BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Junior Debt
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Senior Debt
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Subordinate debt
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None of the above
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Detailed explanation-1: -Mezzanine debt and junior debt are examples of quasi-equity financing as they are both usually unsecured and flexible when it comes to the repayment schedule of the loan.
Detailed explanation-2: -Quasi equity, also known as quasi capital, is a form of debt that shares some traits with equity. The characteristics include flexible repayment terms or subordinated debt. This means quasi equity it is either unsecured or has lower priority than other debt.
Detailed explanation-3: -Types of subordinated debt include high yield bonds, mezzanine with and without warrants, Payment in Kind (PIK) notes, and vendor notes, ordering from the highest to the lowest priorities, respectively. Another way to express the different priorities of securities is with a subordination scale.