Business, Legal & Accounting Glossary
A transaction in which a corporation exchanges existing bonds (debt) for newly issued stock (equity). For example, XYZ company can in essence cancel a portion of its debt and transfer the equivalent balance to equity. A debt-equity swap can help a company that is in financial trouble by canceling some of its outstanding debt. Other companies may take advantage of this process if the current value of their stock is high, allowing them to trade more debt for less stock.
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This glossary post was last updated: 21st September, 2022 | 0 Views.