You may have potentially heard of recovery rates and Pari Passu. Parri Passu translates to “on equal footing”, which is a provision to a bond where capital structure is treated as one class. The plain vanilla example is debt due in 30 years would have the same pro rata recovery (in a situation of default) as someone with debt due in six months. Do note, priorities of claims are not always absolute, as all impaired classes get to vote on reorganization plans. This process may allow junior creditors to recover some value, even though more senior creditors do not get paid in full.