Practical Law Glossary Item 6-595-7786 (Approx. 3 pages)
Glossary
B-note
A type of promissory note executed and delivered by the borrower under a commercial real estate loan. A B-note is subordinate to one or more senior promissory notes, which are referred to as A-notes.
B-notes carry a higher interest rate than A-notes and are attractive to investors purchasing interests in commercial real estate loans on the secondary market.
A lender may divide a loan into one or more A-notes and B-notes either:
At the time the loan closes.
After closing, by means of a note splitter agreement.