From the Collaborative Bond and Money Market Data Portal
Ranking refers to the order of repayment in the event of a sale or bankruptcy of the issuer. The term Seniority is also used. When an Issuer is wound up, each Debt Instrument has a specific seniority or ranking in terms of repayment. Senior debt is repaid before subordinated debt. Within Subordinated Debt, Tier 3 gets paid first, followed by Upper Tier 2, followed by Lower Tier 2, followed by Tier 1.
In theory, after Subordinated Debt Instrument holders have been paid, and if relevant, preference share holders are followed by ordinary shareholders. Shareholders are for example not relevant in the context of sovereign and sovereign like borrowers.
Accordingly, in the Collaborative Bond and Money Market Data Model the field Ranking consist of the following attributes:
The latter is used when the Subordinated rank is not clear.
Tier 3, Upper and Lower Tier 2 and Tier 1 constitute different levels of subordination.
Based on available data, on the 1st of October 2017 the size of the Subordinated International Bond Market was USD1.2 trillion equivalent through placements in 37 different currencies.
For information on the size of the Subordinated Bond Market, please use our data sheet tool.
For information on the composition of the Subordinated Bond Market, please use our issuer search tool.
For information on active dealers in the Subordinated Bond Market, please use our dealer search tool.