in-substance debt defeasance

In-Substance Debt Defeasance

A provision in a loan removing it from a balance sheet if cash or a portfolio is set aside for debt service. Usually, defeasance occurs when a borrower owns a portfolio of Treasury securities whose coupons are used to service a debt. When the borrower has set aside sufficient assets to cover the debt, the debt does not need to be recorded on a balance sheet.

in-substance debt defeasance

References in periodicals archive ?
The gain was substantially offset by charges associated with the in-substance debt defeasance of zero coupon notes issued as part of the 1991 LYNX transaction.
The gain recognized from changing to the new accounting standard is substantially offset by charges associated with the in-substance debt defeasance.