top of page
Debt-Equity Swap
A financial restructuring tool where a company's debt is exchanged for equity, sometimes used in distressed M&A scenarios to recapitalize the target.
Implications
A financial restructuring tool where a company exchanges its debt obligations for equity, often used to reduce debt burden, improve liquidity, or as part of bankruptcy proceedings, allowing creditors to become shareholders.
Example
Example: A distressed manufacturing firm negotiates a debt-equity swap with its creditors, converting a portion of its outstanding loans into equity, reducing its debt load and avoiding bankruptcy.
Related Terms
Different from a debt restructuring, which might involve changing the terms of debt, a swap converts debt into equity, altering the ownership structure of the company.
Get INSTANT comprehensive market research of any industry
Chat with AII Consultant Now!
bottom of page