What type of debenture has a claim on corporate assets that ranks below that of regular debentures during liquidation?

Subordinated debentures have a claim on corporate assets that ranks below that of regular debentures in the event of liquidation. This means that in the hierarchy of claims against the company's assets, holders of subordinated debentures will only receive payment after all regular debenture holders and any senior creditors have been paid off. This characteristic makes subordinated debentures riskier compared to regular debentures, as they are further down the line when it comes to recovering funds in a liquidation scenario. Consequently, investors typically expect a higher yield from subordinated debentures to compensate for the additional risk they assume. This structure is important for investors to understand, as it impacts the potential recovery in financial distress situations.