debt restructuring

(redirected from Restructuring of Debt)

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 ?
Total income for the period was $12.9m resulting primarily from management fees and restructuring of debt.
Gulf Finance House (GFH) has announced today its financial results for the first quarter ending 31 March, 2012, recording a net profit of $1 million with total income for the period recorded at $12.9 million resulting primarily from management fees and restructuring of debt.
Summary: Abu Dhabi conglomerate Al Jaber Group is close to a standstill agreement on its $1-billion plus debt restructuring of debt, with more than 90 percent of lenders agreeing to the move.
But the restructuring of debt has been too little and has come too late.
Blank Rome Real Estate and Financial Services Department chair Martin Luskin led the team that represented the owners of 885 Third Avenue, the iconic New York City office building known as the "Lipstick Building, in a prepackaged bankruptcy that resulted in the restructuring of debt and equity positions.
The restructuring of debt, sale of the company, and ongoing market process all require court approval.
The troubled firm also informed shareholders it is unlikely any value would be attributable to its ordinary shares following any restructuring of debt.
The board believed that the proposed restructuring of debt was the best available opportunity of securing the long-term financial viability of British Energy.
Taxes in Workouts: Another provision, which appears in the Senate version and not the House's, would affect the restructuring of debt. Owners would be permitted to delay taxes incurred when they are discharged of indebtedness until they sell the building.
Financial restructuring of debts will address the legacy of a substantial amount of non-performing loans and the risks of going bankrupt and terminating business operations faced by potentially viable enterprises due to temporary liquidity problems and enable these enterprises to return to sound financial performance.