Listen to a Business English Dialogue about Junior issue
Samuel: Hi Ava, have you ever heard of a “junior issue” in finance?
Ava: No, Samuel, I haven’t. What does it mean?
Samuel: A junior issue refers to a type of security or bond that has a lower priority of repayment compared to other debts in case of bankruptcy or liquidation.
Ava: Ah, I understand. So, it’s like being at the bottom of the repayment list if things go south?
Samuel: Exactly. Junior issues typically offer higher returns to investors to compensate for the increased risk of lower priority repayment.
Ava: I see. Are junior issues common in certain industries or sectors?
Samuel: Yes, they’re often found in industries with high levels of volatility or where companies have limited assets to secure debt.
Ava: That makes sense. So, investors who buy junior issues are essentially taking on more risk for potentially higher rewards.
Samuel: Exactly. They’re suitable for investors seeking higher returns but who are also comfortable with the increased risk.
Ava: Got it. Thanks for explaining, Samuel. Junior issues sound like an interesting aspect of the financial market.
Samuel: You’re welcome, Ava. If you have any more questions or want to discuss further, feel free to ask.
Ava: Will do. Thanks again, Samuel.