Debt/Equity Swap

外汇网2021-06-19 14:10:13 40

A refinancing deal in which a debt holder gets an equity position in exchange for cancellation of the debt.

|||There are several reasons why a company may want to swap debt for equity. For example, a firm may be in financial trouble and a debt/equity swap could help avoid bankruptcy, or the company may want to change capital structure to take advantage of current stock valuation.

Covenants in the bond indenture may pvent a swap from happening without consent.

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