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BANIF has been split in two, its good assets have been sold to Banco Santander and – guess what – subordinated creditors have been bailed in.
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The offer was deemed too low, and new bids will be collected this week, to be announced at the end of the month.In the case of Level 3, in return for their $500m, Mr Buffett and his partners will receive new subordinated debt paying annual interest of 9%, about half what the company's $5 billion of outstanding bonds return at secondary-market prices.
As my colleague Giles Tremlett explains: The memorandum places a timebomb under what the Spanish consumers' association Adicae estimates are some €30bn invested in subordinated preference shares by retail customers at local banks – many of which have since been swapped for almost worthless bank stock.
He has a detailed idea of what life will be like 10 years down the line, when sovereignty is subordinated to corporate courts.
Personal goals always are subordinated to group goals, and group goals are always trumped by what the broader organization needs.
A subordinated note is debt that gets repaid last when a borrower has trouble, and in such cases, lenders can receive only a fraction of what they loaned.
"All the required £1.5bn would be raised by converting the bank's subordinated bonds and preferred stock into bank common stock," said the bondholders, who call themselves the LT2 Group because they own what are known as lower tier 2 bonds.
And the first of what will certainly be many shareholder suits has been filed.Both Standard & Poor's and Moody's, top credit-rating agencies, are considering downgrades of Fannie Mae's subordinated debt and preferred stock: unlike the company's bonds, these are not perceived by the markets to enjoy a government guarantee.
Such subordination would violate the equal freedom of the subordinated person.
Virgin Islands Public Finance Authority, $250 million of subordinated revenue bonds.
Subordinated debt was provided by Blackstone Mezzanine Partners.
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