Terms Beginning With 'l'

Leveraged Recapitalization

Leveraged Recapitalization, also known as a leveraged recap, is a plan where a company takes on significant extra debt with the objective of either share repurchasing or paying a large dividend.

In other words, it is finance transaction by a corporate wherein changes its capitalization structure by replacing most of its equity with a package of debt securities consisting of both senior bank debt as well as subordinated debt.