Companies use debt restructuring to avoid default on existing debt or to take advantage of a lower interest rate.
A company will often issue callable bonds to allow them to readily restructure debt in the future. The existing debt is called and then replaced with new debt at a lower interest rate.
Companies can also restructure their debt by altering the terms and provisions of the existing debt issue.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
Debt restructuring — is a process that allows a private or public company – or a sovereign entity – facing cash flow problems and financial distress, to reduce and renegotiate its delinquent debts in order to improve or restore liquidity and rehabilitate so that it… … Wikipedia
debt restructuring — UK US noun [U] (also debt reorganization) ► ECONOMICS, FINANCE an agreement in which a company or government that has lent money to another company or country allows it to pay back its debt in a different way or at a later time than was… … Financial and business terms
debt restructuring — The adjustment of a debt, either as a result of legal action or by agreement between the interested parties, to give the debtor a more feasible arrangement with the creditors for meeting the financial obligations. The management may also… … Accounting dictionary
debt restructuring — The adjustment of a debt, either as a result of legal action or by agreement between the interested parties, to give the debtor a more feasible arrangement with the creditors for meeting the financial obligations. The management may also… … Big dictionary of business and management
Debt Restructuring Fraud — An illegal technique where an individual or corporation hides or transfers assets before filing for bankruptcy. Debt restructuring allows the fraudster to reduce or even erase the debts and then reclaim the assets. Debt restructuring fraud is a… … Investment dictionary
Argentine debt restructuring — Argentina went through an economic crisis beginning in the mid 1990s, with full recession between 1999 and 2002; though it is debatable whether this crisis has ended, the situation has been more stable, and improving, since 2003. (See Economy of… … Wikipedia
Corporate Debt Restructuring — The reorganization of a company s outstanding obligations, often achieved by reducing the burden of the debts on the company by decreasing the rates paid and increasing the time the company has to pay the obligation back. This allows a company to … Investment dictionary
Debt relief — is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. From antiquity through the 19th century, it refers to domestic debts, in particular agricultural debts and… … Wikipedia
Debt settlement — Debt settlement, also known as debt arbitration, debt negotiation or credit settlement, is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. Debt settlement is… … Wikipedia
Debt-for-nature swap — Debt for nature swaps are financial transactions in which a portion of a developing nation s foreign debt is forgiven in exchange for local investments in environmental conservation measures. Contents 1 History 2 How Debt for Nature Swaps Work 3… … Wikipedia