Real estate: senior debt. See also wraparound mortgage. Securities: municipal bond term referring to the debt of government entities within the jurisdiction of larger government entities for which the larger entity has partial credit responsibility.
municipal bond term referring to the debt of government entities within the jurisdiction of larger government entities and for which the larger entity has partial credit responsibility. For example, a township might share responsibility for the general obligations of a village within the township, the debt of the village being underlying debt from the township's standpoint. The term overlapping debt is also used to describe underlying debt, but overlapping debt can also exist with entities of equal rank where, for example, a school district crosses boundaries of two or more townships.
