No, I think you are wrong. MBS is an asset backed security which puts it with the secured creditors group (your # 3). The asset is the the mortgage on the dwelling.
1. DIP Financing. This is whatever liquidity needs must be satisfied in order to either re-org or wind up the companies affairs. First priority. 2. Secured financing and debt. This is asset backed and typically includes plant/property/inventory/intellectual property and so forth. Second priority. 3. Secured creditors. These are specific, asset backed agreements pledging rights in a default. Typically these are things like leased vehicles that require return of the vehicle if the lease contract goes unfulfilled. 4. Preferred shareholders. Shares with liquidation preference are entitled to a return up to par value from funds available. This in a FnF wind up would largely come from liquidation of most reserves and from income generated during the wind up period which would likely takeup to two years. 5. Unsecured creditors. Rarely get anything. Maybe some rights offering if a re-org will start a new venture from the ashes. 6. Common shareholders. Last priority. Rarely get anything but a letter from their broker stating their shares have been cancelled.
? ? What happened to Senior unsecured debt (not a person not bad but a debenture issues as such via IPO) - Junior unsecured debt
Those clearly sit between secured creditors/secured bonds and preferred shareholders and is an omission large enough to drive a truck through
I may have misread the above but it appears to leave out such a company security (non secured debentures) or to equate them to preferred shareholders
? Preferred shareholders have dividend and liquidation right prior to common equity but are absolutely junior by miles and miles to debenture securities - unsecured debt - issued by any company in 11
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