Fixed-interest bearing security for which creditors must subordinate claims to those of non-subordinated claims in the event of the issuer’s liquidation or insolvency. In the event of bankruptcy, there is therefore a high probability that the bond will not be serviced. – Such bonds play a role in the eligibility for own funds of the bank on the part of the supervisory authorities. – See parity proviso, Tier 1, seniority rule, unconditional. – Cf. Deutsche Bundesbank Monthly Report of October 2005, p. 86 f. (Issuance of subordinated debt by German banks 1990 to 2004).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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