In finance, seniority refers to the order of repayment in the event of bankruptcy. Senior debt must be repaid before subordinated debt is repaid. Bonds that have the same seniority in a company’s capital structure are described as being pari passu.
The seniority of bonds recognized in FpML (Financial products Markup Language) are as follows:
| FpML Value | Description |
|---|---|
| Senior | Top precedence |
| SubTier1 | Subordinate, Tier 1 |
| SubUpperTier2 | Subordinate, Upper Tier 2 |
| SubLowerTier2 | Subordinate, Lower Tier 2 |
| SubTier3 | Subordinate, Tier 3 |