Which type of capital structure typically has a junior ranking in terms of debt repayment?

The type of capital structure that typically has a junior ranking in terms of debt repayment is indeed convertible subordinated notes. These notes are classified as subordinated because they rank below other types of debt in the hierarchy of claims on a company's assets in the event of liquidation or bankruptcy.

Subordinated debt must be repaid only after senior debt obligations have been satisfied, which places it at a higher risk compared to senior tranches. The convertible feature allows bondholders to convert their notes into equity shares, providing potential for upside if the company's stock performs well. However, this feature does not enhance their priority in debt repayment; rather, it illustrates the speculative nature of this type of financing.

In contrast, senior secured debt has the highest claim on assets and is secured by collateral, senior unsecured notes carry a higher repayment priority than subordinated notes but without specific collateral backing, and common stock represents equity ownership, which ranks below all forms of debt concerning claims on assets.