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In finance, a holdout problem occurs when a bond issuer is in default or nears default, and launches an exchange offer in an attempt to restructure debt held by existing bond holders. Such exchange offers typically require the consent of holders of some minimum portion of the total outstanding debt, often in excess of 90%, because, unless the ...
Holdout (gambling), a device used to cheat in gambling; Holdout problem, in finance concerning bond redemption; Holdout weapon, a weapon, typically a pistol, which can be sneaked into areas where weapons are normally confiscated or prohibited; Japanese holdout, a World War II soldier in the Pacific who continued to fight after Japan surrendered
Hold-up problems are created from the existence of firm-specific investments, but also from the set of long-term contracts that are used in the presence of the certain investments. Whether a vertical integration is adopted as a solution to the hold-up problem depends on the magnitude of the specific investment and the ability to write long-term ...
The Fed and other bank regulators would insist that bad loans be written down on the books. Bondholders would take haircuts, but these losses are already priced into deeply discounted bond prices." [6] If the key issue is bank solvency, converting debt to equity via bondholder haircuts presents an elegant solution to the problem. Not only is ...
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Mural of a vulture across from Ulster Bank HQ in Dublin, Ireland, intended as critical of vulture funds [1] Anti-vulture fund sign in Dublin. A vulture fund is a hedge fund or private-equity fund that invests in debt considered to be very weak or in default, known as distressed debt. [2]
If a bond's compounded interest does not meet the guaranteed doubling of the purchase price, Treasury will make a one-time adjustment to the maturity value at 20 years, giving it an effective rate of 3.5%. The bond will continue to earn the fixed rate for 10 more years. All interest is paid when the holder cashes the bond.
The credit rating is a financial indicator to potential investors of debt securities such as bonds.These are assigned by credit rating agencies such as Moody's, Standard & Poor's, and Fitch, which publish code designations (such as AAA, B, CC) to express their assessment of the risk quality of a bond.