Pari passu definitions
| Word backwards | irap ussap |
|---|---|
| Part of speech | Pari passu is an adverbial phrase. |
| Syllabic division | pa-ri pas-su |
| Plural | The plural of pari passu is also pari passu. |
| Total letters | 9 |
| Vogais (3) | a,i,u |
| Consonants (3) | p,r,s |
When it comes to financial terminology, pari passu is a crucial concept to understand. Pari passu is a Latin term that means "equal footing" or "on equal terms." In the financial world, it typically refers to the equal ranking of different securities or debts without any preference or priority.
Importance of Pari Passu
Pari passu is essential in finance as it ensures fairness and equal treatment among investors and creditors. When securities or debts are considered pari passu, they are treated equally in terms of repayment, distribution of assets, or other financial obligations. This equal footing provides a level playing field for all parties involved.
Pari Passu Clause
Many financial agreements include a pari passu clause, which specifies that all obligations or securities are pari passu. This clause is crucial in determining the rights and obligations of different parties in case of default, bankruptcy, or other financial difficulties. It helps prevent any preferential treatment of one creditor over another.
Pari Passu Ranking
When multiple securities or debts are pari passu, they share the same ranking and priority in terms of repayment. This means that if a company goes bankrupt or faces financial distress, all pari passu obligations are treated equally, and creditors are paid at the same time and rate.
In conclusion, understanding the concept of pari passu is vital for anyone involved in finance and investing. It ensures fairness, equality, and transparency in financial transactions and obligations. By upholding the principle of pari passu, all parties can trust that they will be treated equally in any financial scenario.
Pari passu Examples
- The creditors will be paid pari passu with each other.
- All shareholders are entitled to receive dividends pari passu.
- The company issued new shares pari passu to existing shareholders.
- The assets will be distributed pari passu among the beneficiaries.
- The bondholders are treated pari passu in the bankruptcy proceedings.
- The terms of the agreement state that all parties will act pari passu.
- The employees will receive bonuses pari passu based on performance.
- The two parties agreed to settle the dispute pari passu.
- The partners will share profits and losses pari passu according to their ownership percentage.
- The scholarships will be awarded pari passu to students who meet the criteria.