A form of subordinate financing widely used in the CMBS lending arena where a subordinate or “B” Note is secured by the same mortgage as the senior or “A” Note but is deeply subordinated to the “A” Note under an Intercreditor Agreement.
Diabolical Questions: Has the Darwinian world of real estate finance evolved an even lower order of creature than the unsecured creditor? Will the onerous Intercreditor Agreements they must agree to render the “B” Note holders and other subordinate creditors (see Mezzanine Debt) even worse off than unsecured creditors in a bankruptcy?
Bankruptcy Code § 510. See also CMBS, Mezzanine Debt, Second Lien Lending, Securitization, Subordination, Subordination Agreement.