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

The senior 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 A/B structure.