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Debt/Equity Swap

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Debt/Equity Swap
A situation in which a debtor (which is a company) replaces the debt held by one or more creditors with a percentage of ownership in the company. A debt-equity swap often occurs if the company would otherwise be unable to repay the creditor(s) anything without going bankrupt. However, the swap may be a result of change from a debt-based to an equity-based capital structure. In either case, these swaps are often considered part of a company's attempt to restructure itself. Some debt agreements restrict the debtor's ability to force a debt-for-equity swap.


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You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap so that you get all four cows back, with a tax deduction for keeping five cows.
You then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
Martinez-Blank has an extensive background in Latin American banking with wide experience in equity capital raisings and privatizations through depositary receipts, debt restructuring, debt/equity swaps, trade finance and debt trading.
 
 
 
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