Minimum Subordinated Amount Clause Samples

The Minimum Subordinated Amount clause sets a required minimum value for subordinated debt or equity that must be maintained in a financial arrangement. In practice, this means that a borrower or issuer must ensure that a certain level of subordinated capital—such as junior loans or preferred shares—remains outstanding and is not repaid or reduced below the specified threshold. This clause is commonly used in loan agreements or bond indentures to protect senior creditors by ensuring that a buffer of subordinated capital absorbs losses first, thereby reducing the risk to senior lenders and maintaining the agreed-upon risk structure.