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Pari passu là gì

00:22, 10/04/2021

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.Bạn đã xem: Pari passu là gì

Pari-passu may describe certain clauses within a variety of financial vehicles, such as loans và bonds, which are debt instruments issued by companies lớn raise cash. Often, these clauses are in place khổng lồ ensure the associated financial product is functioning as an equal to 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 ổn 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 and trusts can also assign an in pari-passu distribution where all the named parties mô tả the assets equally.

How Pari-Passu Works

In finance, the term pari-passu can refer lớn loans, bonds, or classes of shares that have sầu equal rights of payment or equal seniority. Pari-passu can describe any instance where two or more items can clayên ổn 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 to common stoông chồng shares, for example, so that each shareholder has equal rights to claims for dividends, voting rights, và the liquidation of assets.


However, pari-passu does not apply to 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 sự kiện of bankruptcy & liquidation of the company's assets. As a result, pari-passu would not apply khổng lồ creditors và shareholders since the creditors would be paid before the shareholders.

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Wills and 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 and Unsecured Debts

Since an asset backs secured debts, they are often not fully equal to the other obligations held by the borrower. Since there is no asset supporting unsecured debts, there are greater instances of borrower mặc định 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 khổng lồ 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 one another. In other words, a parity bond is an issued bond with equal rights khổng lồ a claim as other bonds already issued. For example, unsecured bonds have equal rights in that coupons may be claimed without any particular bond having priority over another. Therefore, unsecured bonds would be referred to lớn as parity bonds with each other. Similarly, secured bonds are parity bonds with other secured bonds.

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 khổng lồ pledged revenue as compared to a senior lien bond, which is also called a first lien bond. Unsecured debts are subordinate bonds compared khổng lồ secured debts.