first lien debt


The highest priority debt in the case of default. If a property or other type of collateral is used to back a debt, first lien debt holders are paid before all other debt holders. This type of debt holds less risk than a second lien debt.

Use first lien debt in a sentence

When company XYZ filed for bankruptcy, the holders of the First Lien Debt felt secure as they would receive payment priority before all other creditors.

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After my company went bankrupt, we were disturbed to discover that our CEO had negotiated to have his future bonuses recorded as first lien debt and he would now be first in line to get paid.

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