Senior debt
Senior debt is like getting a big loan from someone, like your parents, to buy something important, like a car or a house. The loan is big because you need a lot of money to buy the thing you want. The person who gives you the loan is called a lender, and they want to make sure they get their money back, so they'll make an agreement with you on how you will pay them back.
With senior debt, the lender is a big company or bank that loans money to other companies so they can do big things like build new factories or buy new equipment. The company who gets the loan is the borrower, and they agree to pay back the loan over a certain amount of time with interest.
The reason it's called "senior" debt is because it's like a priority loan. Imagine you borrow money from two people, your parents and your friend. If you can't pay both of them back and you have to choose, you'd choose to pay back your parents first because they gave you the bigger loan and you don't want them to be mad at you. It's the same with senior debt - it's the loan that gets paid back first if the borrower has trouble paying back all their loans at once.
In summary, senior debt is like a really big loan to help companies do big things, and it's called senior because it's like the top priority loan that gets paid back first if the borrower has trouble paying back all their loans at once.
With senior debt, the lender is a big company or bank that loans money to other companies so they can do big things like build new factories or buy new equipment. The company who gets the loan is the borrower, and they agree to pay back the loan over a certain amount of time with interest.
The reason it's called "senior" debt is because it's like a priority loan. Imagine you borrow money from two people, your parents and your friend. If you can't pay both of them back and you have to choose, you'd choose to pay back your parents first because they gave you the bigger loan and you don't want them to be mad at you. It's the same with senior debt - it's the loan that gets paid back first if the borrower has trouble paying back all their loans at once.
In summary, senior debt is like a really big loan to help companies do big things, and it's called senior because it's like the top priority loan that gets paid back first if the borrower has trouble paying back all their loans at once.