Nonproductive loan
Definition
A loan that increases spending power, but is used in business that does not directly increase the economy's output, such as a leveraged buyout loan.
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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University
Term of the Day
Covenant defeasance
Covenant defeasance allows the issuer to remove the bond's covenants by placing the remaining payments with a trustee in escrow to be paid out on schedule.
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