Debt/Equity Swap
2020-08-10 15:36
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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 prevent a swap from happening without consent.
