What is 'seniority' in SAP FS-BA-PM-CR - Credit Risk?

seniority - Overview

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Specifies the sequence in which collateral is to be taken into account. A transaction or a collateral item can be described as senior or junior.

seniority - Details

• 
  Key Concepts: 
  Seniority is a concept used in Credit Risk Management (CRM) within the Financial Services (FS) Business Area of SAP. Seniority is a measure of the priority of a debt instrument in terms of repayment. It is used to determine the order in which creditors are paid in the event of a default. Seniority is typically based on the date of issue, with earlier issues having higher priority. 
  
  How to use it: 
  In SAP FS-BA-PM-CR Credit Risk Management, seniority is used to determine the order in which creditors are paid in the event of a default. This information can be used to assess the risk associated with a particular debt instrument and to make decisions about whether or not to invest in it. 
  
  Tips & Tricks: 
  When assessing the risk associated with a debt instrument, it is important to consider not only its seniority but also its credit rating and other factors such as its maturity date and interest rate. 
  
  Related Information: 
  For more information on Credit Risk Management in SAP FS-BA-PM-CR, please refer to the official SAP documentation.