A two-tranche liability position that consists of senior (A) and subordinated (B) securitized loans. In an A/B structured loan, the securitized loan (e.g., mortgage loan) is sliced into two tranches: a tranche constructed by one senior note or more (A-notes) and another built up from one junior note or more (B-notes). Each B-note is normally secured by the mortgage which secures the A-note.

The A-note may be securitized and divided among participants in (certificate holders of) the securitization trust, or otherwise the holders may have participation interests in a single note, which are not secured by the mortgage. The junior participants are not in a direct relationship with the borrower (issuer of certificates) where their rights flow through the senior participants.

It is also known as junior/senior structure.