long-term debt instrument that is not secured by a mortgage or other lien on specific property. Because it is unsecured debt, it is issued usually by large, financially strong companies with excellent BOND RATINGS. There are two kinds of debentures: a senior issue and a subordinated (junior) issue, which has a subordinate lien. The order of a prior claim is set forth in the bond INDENTURE. Typically, in the event of liquidation, subordinated debentures come after senior debt.