pari passu

Definition

Latin for 'equal footing,' meaning creditors or securities rank equally in priority for payment. If the ship sinks, you all go down together—very democratic, if not particularly comforting.

Example Usage

The bond terms specified that new debt would rank pari passu with existing bonds, ensuring no senior creditor could jump the line.

Origin

Directly from Latin 'pari passu' meaning 'with equal step,' adopted into legal and financial terminology.

Fun Fact

Pari passu clauses became controversial in sovereign debt restructuring when holdout creditors used them to block Argentina's debt deals.

Source: Bond indentures and credit agreements

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