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In a debt-for-equity swap, a company's creditors generally agree to cancel some or all of the debt in exchange for equity in the company. [3] Debt for equity deals often occur when large companies run into serious financial trouble, and often result in these companies being taken over by their principal creditors.
Bondholders who withhold their consent and retain their right to seek the full repayment of original bonds, may disrupt the restructuring process, creating a situation known as the holdout problem. The contractual terms for obligating all bondholders to accept a restructuring approved by some supermajority is typically spelled out in what are ...
Usually this covers all the assets of a corporation and is often used for revolving credit lines. It is the debt that has priority for repayment in a liquidation. It is a class of corporate debt that has priority with respect to interest and principal over other classes of debt and over all classes of equity by the same issuer.
Russia's finance ministry said on Monday it had sent an order to a correspondent bank for the payment of coupons on eurobonds amounting to $117.2 million which are due on Wednesday. The diplomatic ...
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt ...
This is most commonly done for nonrecourse loans, where the creditor cannot make other claims on the debtor; a common example is a situation of negative equity on a mortgage loan in common law jurisdictions such as the United States, which is in general non-recourse. In this latter case, default is colloquially called "jingle mail"—the debtor ...
Bonds below Baa/BBB (Moody's/S&P) are considered junk or high-risk bonds. Their high risk of default (approximately 1.6 percent for Ba) is compensated by higher interest payments. Bad Debt is a loan that can not (partially or fully) be repaid by the debtor. The debtor is said to default on their debt. These types of debt are frequently ...
If a government does not meet an obligation, it is in "default". As governments are sovereign entities, creditors who hold debt of the government cannot easily seize the assets of the government to re-pay the debt (though "Vulture funds" often find ways to do so). The recourse for the creditor is to request to be repaid at least some of what is ...