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Is there a limit on how much senior debt could be issued? If a company issues a small amount of debt relative to its assets and wants to issue more could it still be called "senior" or it would have to be labeled junior because there is a small amount of outstanding debt that has priority when paying? Could the company issue a lot of debt relative to its assets and call it senior?

If somebody could provide a link to read about this, I would be grateful. I could not find anything

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closed as off-topic by Attack68, skoestlmeier, amdopt, olaker Apr 16 at 18:16

  • This question does not appear to be about quantitative finance within the scope defined in the help center.
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    $\begingroup$ I'm voting to close this question as off-topic because this question is not about quantitative finance $\endgroup$ – Attack68 Apr 14 at 20:31
  • $\begingroup$ This would be covered by a part of the covenants package under the trust indenture. If an issuer were to do this excessively, it would likely be an event of default. $\endgroup$ – Kch Apr 15 at 23:21
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Covenants from the first issuance may restrict additional issuance or debt ratios.

https://corporatefinanceinstitute.com/resources/knowledge/finance/debt-covenants/

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