Debt restructuring

Definition:

Modification of the terms of a loan to provide relief to a debtor who could otherwise default on payments. The restructuring may involve extending the period of repayment, reducing the total amount owed, or exchanging a portion of the debt for equity in the debtor company. Also see extension, composition, debt-for-equity swap.

Investing Essentials


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

Term of the Day

Short squeeze

When a lack of supply tends to force prices upward. In particular, when prices of a stock or commodity futures contracts start to move up sharply and many traders with short positions are forced to... Read More

Subscribe to the Term of the Day via email Get the Term of the Day in your inbox!


Create your free portfolio