Senior Unsecured Notes

Senior Unsecured Notes refer to a type of debt security that holds seniority over other unsecured debts in the event of liquidation but does not have collateral backing them. This makes them a relatively higher risk compared to secured notes but often they offer higher returns due to this risk factor. Issued by corporations, these notes are a commonly used financial instrument to raise capital without diluting existing shareholder equity.Investors in Senior Unsecured Notes rely on the creditworthiness of the issuer, as they do not have the fallback of specific pledged assets. Therefore, thorough evaluation of the issuer’s financial health and repayment ability is crucial. These notes typically have a fixed maturity date and pay periodic interest, attracting investors seeking steady income.