debt restructuring

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Debt restructuring

Modification of the terms of a loan to provide relief to a debtor who could otherwise default on payments. The restructuring may involve extending the period of repayment, reducing the total amount owed, or exchanging a portion of the debt for equity in the debtor company. Also see extension, composition, debt-for-equity swap.

Debt Restructuring

The process of a person or business negotiating and agreeing with its creditors to reduce its debt or to revise a repayment plan. Debt restructuring often occurs when a person or company has taken on too much debt and is in danger of bankruptcy. Debt restructuring is beneficial to the person or company requesting it because it often results in a significant discount and/or a more flexible repayment schedule. It is usually less expensive than a bankruptcy would be. Likewise, it is beneficial to the creditors because a bankruptcy will likely result in some debt being discharged; creditors generally prefer debt restructuring because they would rather be paid less than not paid at all. See also: debt-to-equity swap, restructuring, capital structure.

debt restructuring

An exchange of one or more new debt issues for outstanding debt issues that can occur when the new issues have interest rates and/or maturities that differ from those of the outstanding issues. For example, a firm might offer holders of 9% coupon bonds with 5 years to maturity a new bond with a higher-coupon rate and a 25-year maturity. Creditors having difficulty making interest and/or principal payments often restructure their debt to reduce the size of the interest payments and to extend debt maturity. Also called troubled debt restructuring. Compare restructuring.
References in periodicals archive ?
The restructuring of debt, sale of the company, and ongoing market process all require court approval.
7 million extraordinary gain related to the restructuring of debt and a $2.
Grosvenor led the restructuring of all finance operations as well as the restructuring of debt and ultimately the profitable sale of Smith Bucklin to a new group of investors.
Other elements of the plan include raising of interim funding, restructuring of debt with secured creditors and arrangement of $4.
About $490 million in additional sales tax revenues annually through fiscal 2008 is now available to TFA bondholders due to the restructuring of debt originally issued by MAC, increasing coverage slightly.
The auditor will normally reach substantial doubt that an entity can continue as a going concern if the entity is unable to meet its obligations as they become due without substantial disposition of assets outside the ordinary course of business, restructuring of debt or externally forced revisions of its operations or similar actions.
The restructuring of debt was the first step toward improving the long-term health of All Star Gas, and this financing is another positive step for the company and its customers," said Gordon.
The rating action on Oxford Life, Christian Fidelity and North American Insurance primarily reflects continued stress across the entire organization, the ongoing uncertainties surrounding the restructuring of debt at the parent company and the negative pressures this could cause on the life operations.
They reflect Asarco's high debt leverage, relatively high-cost position in the copper mining industry and the restructuring of debt with creditor banks, which is currently in default.
Correnti said the Company is continuing discussions with its lenders regarding the restructuring of debt or extension of certain debt maturities.
Furthermore, the structures are exposed to the risk of a province declaring an economic emergency, which could lead to a restructuring of debt.
Allegheny University Medical Centers announced today that it had reached agreement with bondholders on a restructuring of debt related to Forbes Health System.