Subordination Clauses in Bond Indentures

Subordination clauses in bond indentures

A) may restrict the amount of additional borrowing the firm can undertake.
B) are always bad for investors.
C) provide higher priority to senior creditors in the event of bankruptcy.
D) may restrict the amount of additional borrowing the firm can undertake and provide higher priority to senior creditors in the event of bankruptcy.
E) All of the options are true.

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