Pari passu is a
Latin phrase that means "hand-in-hand" or "at the same time", and by extension also "fairly", "without partiality", commonly used as a
Law jargon.In
finance this term refers to two or more
loans,
bonds or series of
preferred stock having equal rights of payment, i.e., having the same level of
seniority. For
asset management firms, the term denotes an equal allotment of trades to strategically identical funds or managed accounts.This term is also often used in
bankruptcy proceedings where
creditors are said to be paid 'pari passu', or each creditor is paid pro rata in accordance with the amount of his claim. Here its meaning is 'equally and without preference'.
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