debt restructuring

(redirected from Debt-for-equity)

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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
completed a debt-for-equity exchange with Goldman Sachs & Co.
Global Banking News-October 26, 2016--Chinese commercial banks increase capital for debt-for-equity swaps
Summary: WASHINGTON - Barneys New York has been taken over by Perry Capital in a debt-for-equity swap that reduces the luxury retailer's borrowings by $540 million, allowing the chain to invest more in its rebounding business.
The IRS issued final regulations (T.D.9557) that provide guidance on the recognition of discharge of indebtedness (DOI) income in partnership debt-for-equity transfers taking place on or after Nov.
Summary: Major lender Royal Bank of Scotland has withdrawn from talks about a proposed debt-for-equity swap with retailer Peacocks.
and its key unit due to a growing likelihood of their debt forgiveness or debt-for-equity swap deal.
Embattled shareholders of engineering group Jarvis will be left with just 4.75% of the company following a debt-for-equity restructuring.
EMBATTLED shareholders of engineering group Jarvis will be left with 4.75% of the company following a debt-for-equity restructuring, it emerged yesterday.
Jarvis said details of the proposed debt-for-equity swap were still being discussed, but it was likely to leave existing shareholders with 5% or less of the value of the total shares in issue.
We send in our own people, we inject fresh capital or do a debt-for-equity swap, we may bring in a private partner, or "sponsor," we may put in a new CEO or even a whole management team.