Definition

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.

Term of the day

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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