Capital structure

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They asked me for my place in the capital structure. I said I was senior unsecured. They fired me — for insubordination.

—Hunter Barkley’s forthcoming The ISDA Protocol (as yet unpublished and, come to think of it, unwritten)

Of a corporation, the arrangement, priority and ranking of its shareholders, creditors and debentureholders.

Usually, common shareholders at the bottom, then preferred shareholders, then subordinated creditors, then unsecured (aka “ordinary”) creditors, then secured creditors.

That kind of thing.

When you have a convoluted corporate structure — hey: who doesn’t? — then the arrangement between the various entities in your group of shareholdings, inter-company loans, parental guarantees and so on can be quite the game of pan-dimensional chess.