Degearing

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Degearing

The process of a company repaying debt and issuing equity in order to alter its capital structure. A capital structure is how a company finances itself. Some (though not all) analysts believe that minimizing debt and maximizing equity can reduce the company's risk because, most of the time, paying coupons on debt is required while paying dividends on equity is not. Degearing is therefore a strategy to decrease risk while also maintaining the same level of financing. See also: Deleverage.
References in periodicals archive ?
strengthen and degear its balance sheet by redeeming some [pounds
requirement, we believed that the company could degear rapidly and still
With limited ongoing capex requirement, we believed that the company could degear rapidly and still continue its roll up strategy.
In aggregate, earnings and dividend momentum in the portfolio remained strong and companies continued to degear in line or ahead of expectations.
2x debt to EBITDA, a slight reduction on prior period as the underlying portfolio companies degear.