Which type of debt is subordinated to all operating company securities in a holding company structure?

The concept of subordinated debt within a holding company structure is fundamental to understanding the hierarchy of claims on a company's assets in the event of liquidation or bankruptcy. Holding company debt, often referred to as Holdco debt, is typically unsecured debt incurred at the holding company level. This type of debt ranks behind all the operational company (Opco) securities, which are associated with the business's actual operations.

When a holding company holds the equity interests or lenders in the operating companies, any debt issued at the Holdco level is subordinate to the debt issued by the operating companies. This means that in the event of liquidation, holders of Holdco debt will only recover their investments after all Opco creditors have been paid. This makes Holdco debt inherently riskier compared to Opco debt due to its subordinate position in the capital structure.

The other types of debt mentioned do not fit this definition. Opco debt refers to the direct debt held by operating companies and is senior to Holdco debt. Mezzanine debt is a hybrid of debt and equity financing that typically ranks below senior debt but is often above equity in a company's capital structure, making it senior to Holdco debt. Secured debt is backed by collateral, giving it a higher claim on assets and