Novate financial definition of novate
novation (redirected from novate)
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1. The transfer of a contract from one party to another by mutual consent of the original counterparties
and the concurrence of the new party.
2. See: Rollover
The substitution of one debt with another debt.
The substitution of a new contract, debt, or obligation for an existing one. Usually encountered when a tenant assigns the lease to another,or when a new building owner requires all existing tenants to execute novation agreements.The effect is to extinguish all obligations under the old agreements and replace them with the new obligations.
References in periodicals archive
Keppel has announced a deal with Borr Drilling to novate
the construction contracts of the five jackup rigs currently being built by Keppel FELS for Transocean Ltd (Transocean).
M2 EQUITYBITES-14 June 2010-BH Global receives request from Brevan Howard (Jersey) LP to novate
existing management agreement(C)2010 M2 COMMUNICATIONS http://www.
Madison is currently evaluating several options to either run off or novate
the company's remaining outstanding liabilities.