Pari passu là gì

What Is Pari-Passu?

Pari-passu is a Latin phrase meaning "equal footing" that describes situations where two or more assets, securities, creditors, or obligations are equally managed without preference. An example of pari-passu occurs during bankruptcy proceedings: When the court reaches a verdict, the court regards all creditors equally, và the trustee will repay them the same fractional amount as other creditors and at the same time.quý khách đã xem: Pari passu là gì

Pari-passu may describe certain clauses within a variety of financial vehicles, such as loans & bonds, which are debt instruments issued by companies to lớn raise cash. Often, these clauses are in place to ensure the associated financial sản phẩm is functioning as an equal lớn all similar others.

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Pari-passu is a Latin phrase meaning "equal footing."In finance, "equal footing" means that two or more parties to a financial contract or clayên are all treated the same.Pari-passu is comtháng in bankruptcy proceedings as well as debts such as parity bonds in which each các buổi party gets the same amount. Wills & trusts can also assign an in pari-passu distribution where all the named parties chia sẻ the assets equally.

How Pari-Passu Works

In finance, the term pari-passu can refer to loans, bonds, or classes of shares that have equal rights of payment or equal seniority. Pari-passu can describe any instance where two or more items can claim equal rights as the other.

Equity Shares

Within the marketplace, all new equity shares (called a secondary offering) have equal rights with existing shares or those that were previously issued. In that sense, the shares are pari-passu. Pari-passu can apply khổng lồ comtháng stochồng shares, for example, so that each shareholder has equal rights khổng lồ claims for dividends, voting rights, và the liquidation of assets.

Creditors

However, pari-passu does not apply khổng lồ creditors such as banks. If a company has debt or loans outstanding, there's a pecking order in which certain creditors are repaid first in the event of bankruptcy & liquidation of the company's assets. As a result, pari-passu would not apply to creditors và shareholders since the creditors would be paid before the shareholders.

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Wills và Trusts

Similar Products

Often, identical items will be pari-passu, coming with the same benefits and costs of the other items with which they are grouped. In other situations, items may only be pari-passu in one or only certain aspects. For example, two competitors may offer two functionally identical widgets for the same price with superficial differences such as color. These widgets are functionally pari-passu but may be aesthetically different.

Pari-Passu & Unsecured Debts

Since an asset backs secured debts, they are often not fully equal to lớn the other obligations held by the borrower. Since there is no asset supporting unsecured debts, there are greater instances of borrower default or bankruptcy. Further, a provider of unsecured financing may enact clauses that prsự kiện a borrower from taking part in certain activities, such as the promising of assets for another debt lớn keep a position with regard to repayment.

A parity bond refers khổng lồ two or more bond issues with equal rights of payment or equal seniority to lớn one another. In other words, a parity bond is an issued bond with equal rights lớn a clalặng as other bonds already issued. For example, unsecured bonds have sầu equal rights in that coupons may be claimed without any particular bond having priority over another. Therefore, unsecured bonds would be referred lớn as parity bonds with each other. Similarly, secured bonds are parity bonds with other secured bonds.

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Example of Pari-Passu

A parity bond stands in contrast khổng lồ a junior lien or a senior lien bond. A junior lien bond, also called a subordinate bond, has a subordinate claim lớn pledged revenue as compared to a senior lien bond, which is also called a first lien bond. Unsecured debts are subordinate bonds compared to lớn secured debts.