Primary navigation:

QFINANCE Quick Links
QFINANCE Topics
QFINANCE Reference
Add the QFINANCE search widget to your website

Home > QFINANCE Dictionary > Definition of unsecured creditor

Definition of

unsecured creditor

Finance

creditor making unsecured loans a creditor who is owed money, but has no security from the debtor for the debt. Unsecured creditors are at risk of losing everything, as official procedures may absorb most of the money remaining after a business failure and small creditors may not be paid.

Recommended Further Reading (Term count)
  • Minimizing Credit Risk
    by Frank J. Fabozzi
    Financial corporations and investors face several types of risk. One major risk is credit risk. Despite the fact that market participants typically refer to “credit risk” as if it is one-dimensional, there are actually three forms of this risk: credit default risk, credit spread risk, and downgrade risk.Credit default risk is the risk that the issuer will fail to satisfy the terms of the obligation with respect to the timely payment of interest...
unsecured creditor - Related Articles
  • Minimizing Credit Risk

    Best Practice

    creditors and unsecured creditors, the absolute priority rule guarantees their seniority to equity holders. However, in the case of a reorganization, the absolute priority rule rarely holds because in practice unsecured creditors do in fact typically receive distributions for the entire amount of their claim
    By Frank J. Fabozzi

  • Borrowing Costs and Capitalization

    Calculations

    that is indicative of credit quality. The credit quality is greater for secured/collateralized senior debt than for unsecured subordinated debt issued by the same company, and hence the former typically carries a lower rate of interest. Companies that have higher levels of debt must typically pay higher interest

  • Bankruptcy Resolution and Investor Protection in Sukuk Markets

    Best Practice

    According to a report by Moody’s, many of the sukuk structures applied have been effectively reduced to a form that is identical to conventional unsecured bonds. Most asset-basedsukuk may have the form of asset-backed sukuk, but not the substance.4 In other words, although most sukuk have assets
    By Kamal Abdelkarim Hassan, Muhamad Kholid

More

Definitions of ’unsecured creditor’ and meaning of ’unsecured creditor’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’unsecured creditor’ and other financial terms with our online QFINANCE Financial Dictionary.

Back to top

Related Blog Posts

More related Blog results