Collective Action Clause (CAC)

Definition:

CAC allows bondholders to agree on debt restructuring even when some bondholders are against restructuring as long as majority agrees.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Captive finance company

A company, usually a subsidiary that is wholly owned, whose main function is financing consumer purchases from the parent company.

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