Debt Assignment

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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 ?
These suggestions make little business sense however, as manually verifying consent prior to placing an autodialed call is costly and inefficient, and creditors are not apt to indemnify their debt assignments.
In exchange for the vendor debt, the Canadian corporation has agreed to issue its one-year zero coupon notes to the vendors in the face amount of the vendor debt and convey the vendor debt assignments to a wholly-owned Canadian subsidiary.