Glossary · Capital structure
Subordination
The ranking of claims in the capital stack: who gets paid before whom in a default.
Why it matters
It defines the actual risk each tranche is taking.
Related
- Capital stack
The layered financing in a deal, from senior debt (lowest risk and return) up through mezzanine, preferred equity and common equity (highest).
- Senior debt
The most secured layer of the capital stack — first claim on cash flow and collateral, lowest cost, typically 50–65% of cost.
- Mezzanine debt
Junior debt that sits between senior and equity in the capital stack, with a higher cost (typically 10–15%), used to fill the leverage gap.
Words are easy. A match is hard.
GPX turns one deal document into a ranked, briefed shortlist of the lenders and investors that actually fit — debt and equity.