Leveraged Recapitalization

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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.

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Default Risk Premium

What is Default risk premium? Default risk premium refers to the additional return received by the lender from the borrower by assuming default risk. Default r......
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