Is subordination clause used in bond issue agreement?
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dag
Apprentice
Joined: 10 May 2005
Posts: 13
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 Posted: 06/05/08 - 10:26 Post subject: |
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| Hello there everyone. My name is Harrison and I was wondering if you could give me some information about bonds. I am interested in buying some bonds and a friend of mine told me that I should look for subordination clause. Is subordination clause used in bond issue agreement? What is it, after all? Thank you for the posts. |
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bryon
Apprentice
Joined: 28 Aug 2006
Posts: 9
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| Posted: 07/04/08 - 22:32 Post subject: |
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| Hello Harrison. Your friend gave you a good advice. You should look for subordination clause when buying bonds. It should be stated in the agreement. What does it mean? Bond issuer can issue bonds all the time. It means that there can be series of bonds after you buy certain number of them. Subordination clause guarantees that you will be the first to receive payments and then people who bought bonds after you. It is one protective mechanism which can be quite useful sometime. Well, that would be all from me. I wish you all the best with your investments. Bye! |
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