Subordinate Bonds Clause Samples
The 'Subordinate Bonds' clause defines the status and priority of certain bonds in relation to other debts or securities issued by the same entity. In practice, this clause specifies that subordinate bonds will only be repaid after all senior obligations have been satisfied, meaning holders of these bonds assume a higher risk in exchange for potentially higher returns. Its core function is to clearly establish the order of repayment in the event of liquidation or bankruptcy, thereby allocating risk among different classes of creditors and providing transparency to investors.
Subordinate Bonds. Subordinate Bonds may be issued as provided in Article XII of this Indenture.
Subordinate Bonds. The principal, redemption premium, if any, and interest on the Series 2010B Bonds and any Additional Subordinate Bonds will be junior in lien priority will be subordinated in right of payment to principal, redemption premium, if any, and interest payments on the Senior and other Additional Senior Bonds and the payments of Operating Expenses. The Holders of the Subordinate Bonds, by acceptance thereof, expressly agree and acknowledge that no payment shall be payable on the Subordinate Bonds if the Trustee does not hold sufficient funds correctly allocated for such purpose in the accounts in the Subordinated Debt Service Fund which benefit the Subordinate Bonds. Moneys held for the credit of the accounts in the Subordinate Debt Service Fund which benefit the Subordinate Bonds may be transferred in certain events to cure shortfalls in the accounts in the Debt Service Fund which benefit the Senior Bonds. In the event of any bankruptcy, insolvency, reorganization or similar proceeding with respect to the Issuer or upon the maturity of any Senior Bonds (whether by lapse of time, acceleration or otherwise), Holders of Senior Bonds will be entitled to receive payment thereof in full before the Holders of the Subordinate Bonds are entitled to receive payment thereof. In the event of bankruptcy or similar proceedings, any payment or distribution of assets otherwise payable to Holders of the Subordinate Bonds will be paid to Holders of Senior Bonds until all