A refinancing technique where debt holders forgive some of the debt they hold in exchange for equity in the company. Often this is done in bankruptcy or near-bankruptcy situations if the company is unable to pay back the debt. While the lender gambles by taking equity, the lender bets that the stock price will rise and dividends will eventually be paid, thus making up the debt.
debt-equity swap - Investment & Finance Definition
Webster's New World Finance and Investment Dictionary Copyright © 2010 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.
Used by arrangement with John Wiley & Sons, Inc.
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"debt-equity swap." YourDictionary, n.d. Web. 14 January 2019. <https://www.yourdictionary.com/debt-equity-swap>.
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debt-equity swap. (n.d.). Retrieved January 14th, 2019, from https://www.yourdictionary.com/debt-equity-swap
