Equity that sits senior to common equity in the capital stack, receiving a fixed return and priority on distributions before common holders, but subordinate to all debt.
Related terms
- Recourse loan
A loan where the lender can pursue the borrower's other assets or guarantors beyond the pledged property if the collateral does not cover the debt — the norm f…
- Refinancing
Replacing existing debt with a new loan, often to release equity or lower cost.
- Senior debt
The first-ranking loan with priority claim on cash flows and collateral.
- Subscription line
A short-term revolving credit facility secured against LPs' undrawn commitments, used to fund deals quickly and defer capital calls; it can flatter reported IR…
- Sukuk
Sharia-compliant certificates representing fractional ownership in an underlying asset or project and paying returns from its income rather than interest; a ma…
- Takaful
Sharia-compliant cooperative insurance where participants pool contributions to cover each other's losses, avoiding the interest and uncertainty of conventiona…
- Tranche
A slice of a financing or securitisation with its own risk, return, and priority of repayment; senior tranches are paid first, junior tranches carry more risk…
- Weighted average cost of capital (WACC)
The average rate a project must earn to satisfy all its capital providers.