debt structure

CFA Level II
#1

does bank debt have highest seniority in the case of bankruptcy?

#2

yes

#3

is this an exam question, or are you just asking for ur own sake…in reality, it’s ~30 days of accounts payable and unfunded pension claim

#4

for the exam, i would stick with bank debt as having the highest seniority in bankruptcy

#5

I would stick with short term debt.

#6

Pretty sure its bank debt not short term debt. That’s how it is in the real world, unless the CFAI specifically contradicts this. Bank debt is almost always senior to public debt (i.e short term debt)

#7

I just had a question like this, in Stalla, true. It made ref. to the real world, saying that the order of precedence is established by law, by covenants, by regulations, etc. But, the short term debt has the highest priority, followed by senior debt, subordinated debt, then preferred, then common equity.

#8

…edit, pointless conversation