You are an investment analysis at a hedge fund that is somewhat risk adverse. They do invest in distressed debt but prefer to invest in the safest piece of debt in the companys capital structure. Which piece of debt would you recommend to your boss and why?

XYZ Co has the following debt outstanding:

$200mm of 4% bank debt due 10/25

$100mm of 6% senior notes due 10/28

$300mm of 8% sub notes due 10/28