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 ?
Such statements include without limitation, statements regarding the impact on the Company and its stockholders from the closing of the debt restructuring transaction.
1 million in loan fees related to debt restructuring compared to $257,000 in loan fees during the first quarter of 1993.
15 would apply to an isolated troubled debt restructuring by a debtor involved in bankruptcy proceedings if such restructuring did not result in a general restatement of the debtor's liabilities.
NEW YORK -- Statements about potential debt restructuring by Rafael Correa, the apparent victor in Ecuador's presidential election yesterday, raise credit concerns, according to Fitch Ratings.
15, 2002, pending the completion of a debt restructuring plan.
15, Accounting by Debtors and Creditors for Troubled Debt Restructurings, also would be amended to require a creditor to account for a troubled debt restructuring involving a modification of terms at fair value by the restructuring date.
Recently, the group has advised Iraq, Nigeria and Nicaragua in debt restructuring, as well as various countries in Latin America, Eastern Europe, the Middle East and the Maghreb regions in privatisation strategies and is currently advising the Bolivian government in their oil and gas activities.
Agreement on the terms of a consensual debt restructuring is hoped to be accomplished prior to the end of the next quarterly report.
Earlier this year, Fitch cited the need for OPC's debt restructuring to maintain a reasonable level of debt amortization.
Terrance Schreier, chairman and chief executive officer of the company, confirmed that the completion of the company's debt restructuring may have a significantly positive operating impact upon the company.
NASDAQ-NMS: AIRM), the nation's largest exclusive provider of emergency air medical transportation systems and services, today confirmed that it has begun its debt restructuring activities, initiating the pay-off of more than $3 million of long-term debt.
Various kinds of debt restructuring are discussed, along with the biggest challenges in public finance.