Parity Bond
Categories: Bonds
Just like European aristocracy and high school cafeterias, bonds have a pecking order. Some bonds get more priority than others. In the case of bonds, it has to do with how quickly they get paid when it comes to a default situation. Senior bond holders get their money first. Once they're paid off, subordinate debt holders start getting something.
A parity bond represents two series of bonds that are on the same level. They have the same priority, or level of seniority. It's like two dukes meeting each other, or two starting quarterbacks. Parity bonds have the same spot in the pecking order.
