Debt Assignment

Debt Assignment

The transfer of debt, and the right of receiving repayment, from a creditor to a third party, usually, but not always, a subsidiary of the original creditor. A company may assign debt to a subsidiary to protect investors who do not wish to invest in a new, risky deal, or it may simply wish to hide losses from shareholders. The debtor is unaffected unless the third party draws up new terms. See also: Enron scandal, Aggressive accounting.
References in periodicals archive ?
Aviation Group received $800,000 in cash and debt assignment for its Casper operations, while retaining working capital and other assets not sold with a net liquidation value of approximately $400,000.
2 and Corporations Law Section 251AA(2) that at the General Meeting of the Company held today that the following (ordinary) resolution as set out below was passed by a show of hands without amendment:"That the Company give its approval to:a) the Share Sale Agreement to be entered into by the Company and each of the other Central Vendors with Solomon Gold plc in January 2010 for the sale by the Company and each of the other Central Vendors of all of the share capital in Central Minerals Pty Ltd; andb) the Debt Assignment Deed to be entered into by the Company with Solomon Gold plc in January 2010 for the concurrent assignment of the debt owed by Central to the Company to Solomon Gold plc.
Additionally, given its intimate knowledge of the properties and its leases, CSFB was able to provide the most attractive and flexible financing in what was a highly sought after debt assignment.
The outlook for all Conseco's ratings, including this debt assignment, is positive.