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<title>Debt restructuring</title>

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<span id="openzim-page-title" class="mw-page-title-main"><span class="mw-page-title-main">Debt restructuring</span></span>

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</style><div role="note" class="hatnote navigation-not-searchable">Not to be confused with <a href="Refinancing" title="Refinancing">Refinancing</a> or <a href="Debt_consolidation" title="Debt consolidation">Debt consolidation</a>.</div>

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<p><b>Debt restructuring</b> is a process that allows a private or public company or a sovereign entity facing cash flow problems and <a href="Financial_distress" title="Financial distress">financial distress</a> to reduce and renegotiate its delinquent <a href="Debt" title="Debt">debts</a> to improve or restore <a href="Accounting_liquidity" title="Accounting liquidity">liquidity</a> so that it can continue its operations.

</p><p>Replacement of old debt by new debt when not under financial distress is called "<a href="Refinancing" title="Refinancing">refinancing</a>". Out-of-court <a href="Restructuring" title="Restructuring">restructurings</a>, also known as <b><style data-mw-deduplicate="TemplateStyles:r1238216509">

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</style><span class="vanchor"><span class="vanchor-text">workout</span></span>s</b>, are increasingly becoming a global reality.<sup id="cite_ref-1" class="reference"><a href="#cite_note-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup>

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<div class="mw-heading mw-heading2"><h2 id="Motivation">Motivation</h2></div>

<p>Debt restructuring involves reduction of debt and an extension of payment terms and is usually less expensive than <a href="Bankruptcy" title="Bankruptcy">bankruptcy</a>. The main costs associated with debt restructuring are the time and effort spent negotiating with bankers, creditors, vendors, and tax authorities.

</p><p>In the United States, small business bankruptcy filings cost at least $50,000 in legal and court fees, and filing costs in excess of $100,000 are common. By some measures, only 20% of firms survive <a href="Chapter_11%2C_Title_11%2C_United_States_Code" title="Chapter 11, Title 11, United States Code">Chapter 11</a> bankruptcy filings.<sup id="cite_ref-2" class="reference"><a href="#cite_note-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup>

</p><p>Historically, debt restructuring has been the province of large corporations with financial wherewithal. In the <a href="Great_Recession" title="Great Recession">Great Recession</a> that began with the <a href="2008_financial_crisis" title="2008 financial crisis">2008 financial crisis</a>, a component of debt restructuring called debt mediation emerged for small businesses (with revenues under $5 million). Like debt restructuring, debt mediation is a business-to-business activity and should not be considered the same as individual debt reduction involving <a href="Credit_card" title="Credit card">credit cards</a>, unpaid taxes, and defaulted mortgages.

</p><p>In 2010 debt mediation has become a primary way for small businesses to refinance in light of reduced lines of credit and direct borrowing. Debt mediation can be cost-effective for small businesses, help end or avoid litigation, and is preferable to filing for bankruptcy. While there are numerous companies providing restructuring for large corporations, there are few legitimate firms working for small businesses. Legitimate debt restructuring firms only work for the debtor client (not as a debt <a href="Collection_agency" class="mw-redirect" title="Collection agency">collection agency</a>) and should charge fees based on success.

</p><p>Among the debt situations that can be worked out in business-to-business debt mediation are: lawsuits and judgments, delinquent property, machinery, equipment rentals/leases, business loans or mortgage on business property, capital payments due for improvements/construction, invoices and statements, disputed bills and problem debts.

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<div class="mw-heading mw-heading2"><h2 id="Methods">Methods</h2></div>

<div class="mw-heading mw-heading3"><h3 id="Debt-for-equity_swap">Debt-for-equity swap</h3></div>

<p>In a debt-for-equity swap, a company's <a href="Creditor" title="Creditor">creditors</a> generally agree to cancel some or all of the <a href="Debt" title="Debt">debt</a> in exchange for <a href="Shareholder's_equity" class="mw-redirect" title="Shareholder's equity">equity</a> in the company.<sup id="cite_ref-3" class="reference"><a href="#cite_note-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup>

</p><p>Debt for equity deals often occur when large companies run into serious financial trouble, and often result in these companies being taken over by their principal creditors. This is because both the debt and the remaining assets in these companies are so large that there is no advantage for the creditors to drive the company into bankruptcy. Instead the creditors prefer to take control of the business as a <a href="Going_concern" title="Going concern">going concern</a>. As a consequence, the original shareholders' stake in the company is generally significantly diluted in these deals and may be entirely eliminated, as is typical in a <a href="Chapter_11_bankruptcy" class="mw-redirect" title="Chapter 11 bankruptcy">Chapter 11 bankruptcy</a>.

</p><p>Agreements to swap debt for equity also often occur because companies are obliged to comply, per the terms of a contract with certain lending institutions, with specified <a href="Debt-to-equity_ratio" title="Debt-to-equity ratio">debt to equity ratios</a>.<sup id="cite_ref-4" class="reference"><a href="#cite_note-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup>

</p><p>Debt-for-equity swaps are one way of dealing with <a href="Subprime_lending" title="Subprime lending">sub-prime</a> mortgages. A householder unable to service his debt on a $180,000 mortgage for example, may by agreement with his bank have the value of the mortgage reduced (say to $135,000 or 75% of the house's current value), in return for which the bank will receive 50% of the amount by which any resale value, when the house is resold, exceeds $135,000.

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<div class="mw-heading mw-heading3"><h3 id="Bondholder_haircuts">Bondholder haircuts</h3></div>

<p>A debt-for-equity swap may also be called a "bondholder <a href="Haircut_(finance)" title="Haircut (finance)">haircut</a>". Bondholder haircuts at large banks were advocated as a potential solution for the <a href="Subprime_mortgage_crisis" title="Subprime mortgage crisis">subprime mortgage crisis</a> by prominent economists:

</p><p>Economist <a href="Joseph_Stiglitz" title="Joseph Stiglitz">Joseph Stiglitz</a> testified that bank <a href="Bailout" title="Bailout">bailouts</a> "are really bailouts not of the enterprises but of the <a href="Shareholder" title="Shareholder">shareholders</a> and especially bondholders. There is no reason that American taxpayers should be doing this". He wrote that reducing bank debt levels by converting debt into equity will increase confidence in the financial system. He believes that addressing bank solvency in this way would help address credit market liquidity issues.<sup id="cite_ref-5" class="reference"><a href="#cite_note-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup>

</p><p>Economist <a href="Jeffrey_Sachs" title="Jeffrey Sachs">Jeffrey Sachs</a> has also argued in favor of such haircuts: "The cheaper and more equitable way would be to make shareholders and bank bondholders take the hit rather than the taxpayer. The Fed and other bank regulators would insist that bad loans be written down on the books. Bondholders would take haircuts, but these losses are already priced into deeply discounted bond prices."<sup id="cite_ref-6" class="reference"><a href="#cite_note-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup>

</p><p>If the key issue is bank solvency, converting debt to equity via bondholder <a href="Haircut_(finance)" title="Haircut (finance)">haircuts</a> presents an elegant solution to the problem. Not only is debt reduced along with interest payments, but equity is simultaneously increased. Investors can then have more confidence that the bank (and financial system more broadly) is solvent, helping unfreeze credit markets. Taxpayers do not have to contribute dollars and the government may be able to just provide guarantees in the short term to buttress confidence in the recapitalized institution. For example, <a href="Wells_Fargo" title="Wells Fargo">Wells Fargo</a> owed its bondholders $267 billion, according to its 2008 annual report.<sup id="cite_ref-7" class="reference"><a href="#cite_note-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> A 20% haircut would reduce this debt by about $54 billion, creating an equal amount of equity in the process, thereby recapitalizing the bank significantly.

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<div class="mw-heading mw-heading4"><h4 id="Exit_consent">Exit consent</h4></div>

<p><b>Exit consent</b> is a formal agreement that allows a majority group of <a href="Creditor" title="Creditor">creditors</a> holding <a href="Sovereign_bond" class="mw-redirect" title="Sovereign bond">sovereign bonds</a> to change the non-financial terms of the bonds in a way that makes the bonds effectively worthless for the minority holdouts, motivating them to accept a <a href="Restructuring" title="Restructuring">restructuring</a> offer.<sup id="cite_ref-8" class="reference"><a href="#cite_note-8"><span class="cite-bracket">[</span>8<span class="cite-bracket">]</span></a></sup> Thus creditors willing to restructure can outmaneuver holdouts by using the <a href="Supermajority" title="Supermajority">supermajority</a> voting features of existing bonds to secure changes, which reduce their value as they are tendered in exchange for restructured debt. <a href="Government_bond" title="Government bond">Government bond</a> issued by <a href="Sovereign_nation" class="mw-redirect" title="Sovereign nation">sovereign nations</a> are often perceived as safe investments. But over time, countries in difficult economic situations have needed to restructure their debt structure, or see their national economy collapse. During that process, the country must restructure the outstanding debt by offering its old bonds holders new instruments that reflect new financial terms. It is a process that sees the emergence of holdout creditors who refuse the proposed restructuring, posing a problem to the reorganization process the <a href="Holdout_problem" title="Holdout problem">holdout problem</a>. Therefore, the threat of an exit consent is used to encourage (or coerce) minority creditors to accept the exchange offer so they are not left with diminished bonds.

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<div class="mw-heading mw-heading3"><h3 id="Other_debt_repayment_agreements">Other debt repayment agreements</h3></div>

<p>Most <a href="Defendant" title="Defendant">defendants</a> who cannot pay the enforcement officer in full at once enter into negotiations with the officer to pay by installments. This process is informal but cheaper and quicker than an application to the court.

</p><p>Payment by this method relies on the cooperation of the creditor and the enforcement officer. It is therefore important not to offer more than you can afford or to fall behind with the payments you agree. If you do fall behind with the payments and the enforcement officer has seized goods, they may remove them to the sale room for auction.

</p><p>Subchapter V in the US was created in 2019 by the Small Business Reorganization Act (SBRA). It offers accelerated deadlines and the speed with which the plan is confirmed reduces cost. Congress temporarily increased the ceiling of maximum funded debt eligibility to $7.5mm during COVID-19, and extended it in 2022.

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<div class="mw-heading mw-heading2"><h2 id="In_various_jurisdictions">In various jurisdictions</h2></div>

<div class="mw-heading mw-heading3"><h3 id="Canada">Canada</h3></div>

<p>Two common avenues for restructuring debt exist in Canada: a Division 1 Proposal and a CCAA filing. The former is available to both corporations and individuals who owe $250,000 or more to creditors.<sup id="cite_ref-9" class="reference"><a href="#cite_note-9"><span class="cite-bracket">[</span>9<span class="cite-bracket">]</span></a></sup> The latter is available only to larger companies owing more than $5 million to their creditors.

</p><p>A Division 1 Proposal is a last resort. Created by the <a href="Bankruptcy_and_Insolvency_Act" title="Bankruptcy and Insolvency Act">Bankruptcy and Insolvency Act</a> of 1985, the option to file Division 1 is not an option to be taken lightly as, in the event that the stipulations within the proposal get voted down by creditors or not signed off by the court, one falls into bankruptcy.<sup id="cite_ref-10" class="reference"><a href="#cite_note-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> Division 1 proposals allow companies to be briefly relieved of lawsuits by creditors, as well as they allow companies to stop paying money to their unsecured creditors while the proposal is being reviewed. A Division 1 Proposal to restructure debts must secure 66% of the creditors' votes set in proportion to how much they are owed, and 50% plus one of all creditors votes in terms of number of creditors. On top of such democratic approval, the court itself has to approve how the debts get restructured. Withstanding all such approval, a business or individual can continue operating as normal; otherwise, a business or individual is obliged to proceed into bankruptcy filing.<sup id="cite_ref-11" class="reference"><a href="#cite_note-11"><span class="cite-bracket">[</span>11<span class="cite-bracket">]</span></a></sup>

</p><p>CCAA filings were created by the <a href="Companies'_Creditors_Arrangement_Act" title="Companies' Creditors Arrangement Act">Companies' Creditors Arrangement Act</a>, a piece of legislation first put forward and passed in 1933 and updated later in 1985.<sup id="cite_ref-12" class="reference"><a href="#cite_note-12"><span class="cite-bracket">[</span>12<span class="cite-bracket">]</span></a></sup> A CCAA filing allows a Canadian company to have a window in time (typically between 30 and 90 days) in which they can renegotiate and reorganize their debt payment plans with creditors. During this brief period, creditors cannot seize any money that is owed to them. These windows of time may be renewed multiple times over. Once a CCAA application gets finally rejected, the company in question can be forced into <a href="Receivership" title="Receivership">receivership</a> or <a href="Bankruptcy" title="Bankruptcy">bankruptcy</a>. This could happen for a number of reasons, chief among them being a failure to come to an agreement with creditors as to how to restructure the debt.<sup id="cite_ref-13" class="reference"><a href="#cite_note-13"><span class="cite-bracket">[</span>13<span class="cite-bracket">]</span></a></sup>

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<div class="mw-heading mw-heading3"><h3 id="Switzerland">Switzerland</h3></div>

<div role="note" class="hatnote navigation-not-searchable">Main article: <a href="Insolvency_law_of_Switzerland" title="Insolvency law of Switzerland">Insolvency law of Switzerland</a></div>

<p>Under <a href="Switzerland" title="Switzerland">Swiss</a> law, debt restructuring may occur out of court, or through a court-mediated debt restructuring agreement that may provide for a partial waiver of debts, or for a liquidation of the debtor's assets by the creditors.

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<div class="mw-heading mw-heading3"><h3 id="United_Kingdom">United Kingdom</h3></div>

<p>The majority of debt restructuring within the <a href="United_Kingdom" title="United Kingdom">United Kingdom</a> is undertaken on a collaborative basis between the borrower and the creditors (a <a href="Company_voluntary_arrangement" title="Company voluntary arrangement">company voluntary arrangement</a> or <a href="Individual_voluntary_arrangement" title="Individual voluntary arrangement">individual voluntary arrangement</a>). Historically, such a contract was called a <b>composition with creditors</b>. Should this be unsatisfactory in the first instance, the court may be asked to mediate and appoint administrators.

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<div class="mw-heading mw-heading3"><h3 id="United_States">United States</h3></div>

<p>Among the most common forms of in-court debt restructuring for firms in the United States are <a href="Chapter_11%2C_Title_11%2C_United_States_Code" title="Chapter 11, Title 11, United States Code">Chapter 11</a> and <a href="Chapter_12%2C_Title_11%2C_United_States_Code" title="Chapter 12, Title 11, United States Code">Chapter 12</a> bankruptcy.

</p><p>Under Chapter 11, firms form a plan to reorganize their credit obligations, such that they are able to continue operating while they are going through with their debt repayment plans and after they become solvent. Creditors are given promises to be paid back with firms' future earnings. The nature of these promises can be shaped in a number of ways. In situations where every single impaired creditor of a firm agrees to a settled schedule of repayment, the plan formed is known as a "consensual plan." When a certain class a firm owes does not accept a restructuring plan, said plan may still be approved pursuant to the United States Bankruptcy Code. Such plans are colloquially referred to as "cramdown plans."<sup id="cite_ref-14" class="reference"><a href="#cite_note-14"><span class="cite-bracket">[</span>14<span class="cite-bracket">]</span></a></sup> Chapter 11 is considered to be one of the most expensive and complicated forms of bankruptcy to file.<sup id="cite_ref-15" class="reference"><a href="#cite_note-15"><span class="cite-bracket">[</span>15<span class="cite-bracket">]</span></a></sup> The vast majority of Chapter 11 bankruptcy cases filed end up allowing company management to go forward running the business as usual; however, in certain exceptional cases (fraud, gross incompetence, etc.) the courts do not allow the business the privilege of simply maintaining a "<a href="Debtor_in_possession" title="Debtor in possession">debtor in possession</a>" status. In said cases, a trustee is appointed by the court to run the business until all bankruptcy proceedings are completed.<sup id="cite_ref-16" class="reference"><a href="#cite_note-16"><span class="cite-bracket">[</span>16<span class="cite-bracket">]</span></a></sup>

</p><p>Chapter 12 Bankruptcy is a form of debt restructuring in the United States available to farms and fisheries exclusively; said businesses could be family-owned or owned by corporations. The special debt restructuring rights accorded to farmers and fisheries consequent line 12 of the United States Bankruptcy Code were first granted by Congress in 1986 amid an agricultural debt crisis.<sup id="cite_ref-17" class="reference"><a href="#cite_note-17"><span class="cite-bracket">[</span>17<span class="cite-bracket">]</span></a></sup> Food commodity prices were caught in a downward spiral in the years leading up to 1986, pushing U.S. farmers' debts to levels above $200 billion.<sup id="cite_ref-18" class="reference"><a href="#cite_note-18"><span class="cite-bracket">[</span>18<span class="cite-bracket">]</span></a></sup> This 12th line of the U.S. Bankruptcy Code was initially added only as a temporary measure and remained as a temporary measure until 2005, when it became permanent.<sup id="cite_ref-19" class="reference"><a href="#cite_note-19"><span class="cite-bracket">[</span>19<span class="cite-bracket">]</span></a></sup> Chapter 12 was of great benefit to farmers, because Chapter 11 was often too expensive for family farms and generally only useful for sizeable corporations, while <a href="Chapter_13%2C_Title_11%2C_United_States_Code" title="Chapter 13, Title 11, United States Code">Chapter 13</a> was mainly of use to individuals attempting to restructure very small debts.<sup id="cite_ref-20" class="reference"><a href="#cite_note-20"><span class="cite-bracket">[</span>20<span class="cite-bracket">]</span></a></sup> Farms and fisheries, being midsize and seasonal in nature, were thus in need of a more flexible legal framework through which they could restructure their debts.<sup id="cite_ref-21" class="reference"><a href="#cite_note-21"><span class="cite-bracket">[</span>21<span class="cite-bracket">]</span></a></sup>

</p><p>Firms in the United States are not limited to only using the legal system to manage debts they are incapable of repaying. Out-of-court restructuring, or workouts, constitute consensual agreements between firms and their creditors to adjust debt obligations, mainly for the purpose of evading the costly legal fees associated with Chapter 11.<sup id="cite_ref-22" class="reference"><a href="#cite_note-22"><span class="cite-bracket">[</span>22<span class="cite-bracket">]</span></a></sup> The decision as to whether to enter a workout or take the issue into court is, in large a part, a function of the creditors' and debtors' respective perceptions of how much can be gained or lost through a Chapter 11 proceeding. Creditors know that once Chapter 11 has commenced, a degree of negotiating leverage is lost, as judicial authorities may impose alterations of claims without regard to creditors' consent. On numerous occasions, merely throwing out the threat of filing bankruptcy has initiated the process of coming to a private agreement.<sup id="cite_ref-23" class="reference"><a href="#cite_note-23"><span class="cite-bracket">[</span>23<span class="cite-bracket">]</span></a></sup>

</p>

<div class="mw-heading mw-heading3"><h3 id="Italy">Italy</h3></div>

<p>Debt restructuring within <a href="Italy" title="Italy">Italy</a> may occur either out of court (ex article 167 of the Italian Bankruptcy Law) when a waiver or simple debt rescheduling is required, or through a court-mediated debt restructuring agreement (ex article 182/bis of the Italian Bankruptcy Law) and may provide for a partial waiver of debts, mandatory recapitalization of the debtor, or for a liquidation of certain debtor's assets to repay privileged creditors.

</p>

<div class="mw-heading mw-heading3"><h3 id="Germany">Germany</h3></div>

<p>While being famous for its efficiency in other matter, this is not true for debt restructuring. Many German companies prefer to restructure their debts using the English scheme of arrangement proceedings because they believe that the German restructuring law is not very helpful. The main reason for this is that binding a dissenting minority is only possible under formal insolvency proceedings in <a href="Germany" title="Germany">Germany</a>.<sup id="cite_ref-24" class="reference"><a href="#cite_note-24"><span class="cite-bracket">[</span>24<span class="cite-bracket">]</span></a></sup>

</p>

<div class="mw-heading mw-heading2"><h2 id="Corporate_restructuring">Corporate restructuring</h2></div>

<p>As the incidence of corporate failures has increased in part due to current economic climate, so a more "standard" approach to restructuring has developed. Although every case has unique characteristics, the process of restructuring follows a number of important phases. Initially, declining financial performance will cause key financial covenants - for example, <a href="Leverage_ratio" class="mw-redirect" title="Leverage ratio">leverage ratios</a> - along with the company's underlying cash position to become tight and the prospect of the company needing to restructure will become more obvious to creditors and the debtor alike. This triggers a gathering of creditors and other stakeholders, in anticipation of a breach of financial covenants, a crisis of <a href="Liquidity" title="Liquidity">liquidity</a>, or impending debt instruments coming due that will not be able to be refinanced, all of which could be the impetus for a bankruptcy taking place if not rectified.<sup id="cite_ref-25" class="reference"><a href="#cite_note-25"><span class="cite-bracket">[</span>25<span class="cite-bracket">]</span></a></sup>

</p><p>The lending group (typically comprising corporate finance divisions of banks) will normally commission a corporate advisory group to review the business and its financial position. This will form the basis of any restructuring of facilities. The lending group will typically appoint a Corporate Restructuring Officer (CRO) to assist management in the turnaround of the business, and embracing the recommendations presented by the banking group and the corporate advisory report.

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<ul><li><a href="Debt_relief" title="Debt relief">Debt relief</a></li>

<li><a href="Debt_settlement" title="Debt settlement">Debt settlement</a></li>

<li><a href="Troubled_debt_restructuring" title="Troubled debt restructuring">Troubled debt restructuring</a></li></ul>

<div class="mw-heading mw-heading2"><h2 id="References">References</h2></div>

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</ol></div></div>

<div class="mw-heading mw-heading2"><h2 id="Sources">Sources</h2></div>

<ul><li><cite id="CITEREFTutinoRanciaro2020" class="citation book cs1">Tutino, Marco; Ranciaro, Valerio (2020). <i>Innovation in Financial Restructuring: Focus on Signals, Processes and Tools</i>. Virtus Interpress.</cite></li></ul>

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</style><div id="Corporate_finance_and_investment_banking430" style="font-size:114%;margin:0 4em"><a href="Corporate_finance" title="Corporate finance">Corporate finance</a> and <a href="Investment_banking" title="Investment banking">investment banking</a></div></th></tr><tr><th scope="row" class="navbox-group" style="width:1%;line-height:1.3em; text-align:left;"><a href="Capital_structure" title="Capital structure">Capital structure</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Convertible_bond" title="Convertible bond">Convertible debt</a></li>

<li><a href="Exchangeable_bond" title="Exchangeable bond">Exchangeable debt</a></li>

<li><a href="Mezzanine_capital" title="Mezzanine capital">Mezzanine debt</a></li>

<li><a href="Pari_passu#In_lending,_bankruptcy_and_default" title="Pari passu">Pari passu</a></li>

<li><a href="Preferred_stock" title="Preferred stock">Preferred equity</a></li>

<li><a href="Second_lien_loan" title="Second lien loan">Second lien debt</a></li>

<li><a href="Senior_debt" title="Senior debt">Senior debt</a></li>

<li><a href="Secured_loan" title="Secured loan">Senior secured debt</a></li>

<li><a href="Shareholder_loan" title="Shareholder loan">Shareholder loan</a></li>

<li><a href="Stock" title="Stock">Stock</a></li>

<li><a href="Subordinated_debt" title="Subordinated debt">Subordinated debt</a></li>

<li><a href="Warrant_(finance)" title="Warrant (finance)">Warrant</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%;line-height:1.3em; text-align:left;">Transactions<br><span class="nobold">(terms/conditions)</span></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"></div><table class="nowraplinks navbox-subgroup" style="border-spacing:0"><tbody><tr><th scope="row" class="navbox-group" style="width:1%;line-height:1.3em;"><a href="Public_offering" title="Public offering">Equity offerings</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="At-the-market_offering" title="At-the-market offering">At-the-market offering</a></li>

<li><a href="Book_building" title="Book building">Book building</a></li>

<li><a href="Bookrunner" title="Bookrunner">Bookrunner</a></li>

<li><a href="Bought_deal" title="Bought deal">Bought deal</a></li>

<li><a href="Bought_out_deal" title="Bought out deal">Bought out deal</a></li>

<li><a href="Corporate_spin-off" title="Corporate spin-off">Corporate spin-off</a></li>

<li><a href="Direct_public_offering" title="Direct public offering">Direct public offering</a></li>

<li><a href="Equity_carve-out" title="Equity carve-out">Equity carve-out</a></li>

<li><a href="Follow-on_offering" title="Follow-on offering">Follow-on offering</a></li>

<li><a href="Greenshoe" title="Greenshoe">Greenshoe</a>

<ul><li><a href="Reverse_greenshoe" class="mw-redirect" title="Reverse greenshoe">Reverse</a></li></ul></li>

<li><a href="Initial_public_offering" title="Initial public offering">Initial public offering</a></li>

<li><a href="Private_placement" title="Private placement">Private placement</a></li>

<li><a href="Public_offering" title="Public offering">Public offering</a></li>

<li><a href="Rights_issue" title="Rights issue">Rights issue</a></li>

<li><a href="Seasoned_equity_offering" title="Seasoned equity offering">Seasoned equity offering</a></li>

<li><a href="Secondary_market_offering" title="Secondary market offering">Secondary market offering</a></li>

<li><a href="Underwriting" title="Underwriting">Underwriting</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%;line-height:1.3em;"><a href="Mergers_and_acquisitions" title="Mergers and acquisitions">Mergers and<br>acquisitions</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<li><a href="Contingent_value_rights" title="Contingent value rights">Contingent value rights</a></li>

<li><a href="Control_premium" title="Control premium">Control premium</a></li>

<li><a href="Demerger" title="Demerger">Demerger</a></li>

<li><a href="Divestment" title="Divestment">Divestment</a></li>

<li><a href="Drag-along_right" title="Drag-along right">Drag-along right</a></li>

<li><a href="Management_due_diligence" title="Management due diligence">Management due diligence</a></li>

<li><a href="Managerial_entrenchment" class="mw-redirect" title="Managerial entrenchment">Managerial entrenchment</a></li>

<li><a href="Mandatory_offer" title="Mandatory offer">Mandatory offer</a></li>

<li><a href="Minority_discount" title="Minority discount">Minority discount</a></li>

<li><a href="Pitch_book" title="Pitch book">Pitch book</a></li>

<li><a href="Pre-emption_right" title="Pre-emption right">Pre-emption right</a></li>

<li><a href="Proxy_fight" title="Proxy fight">Proxy fight</a></li>

<li><a href="Post-merger_integration" title="Post-merger integration">Post-merger integration</a></li>

<li><a href="Shareholder_rights_plan" title="Shareholder rights plan">Shareholder rights plan</a></li>

<li><a href="Special-purpose_entity" title="Special-purpose entity">Special-purpose entity</a></li>

<li><a href="Special_situation" title="Special situation">Special situation</a></li>

<li><a href="Squeeze-out" title="Squeeze-out">Squeeze-out</a></li>

<li><a href="Staggered_board_of_directors" class="mw-redirect" title="Staggered board of directors">Staggered board of directors</a></li>

<li><a href="Stock_swap" title="Stock swap">Stock swap</a></li>

<li><a href="Supermajority_amendment" title="Supermajority amendment">Supermajority amendment</a></li>

<li><a href="Corporate_synergy" title="Corporate synergy">Synergy</a></li>

<li><a href="Tag-along_right" title="Tag-along right">Tag-along right</a></li>

<li><a href="Takeover" title="Takeover">Takeover</a>

<ul><li><a href="Reverse_takeover" title="Reverse takeover">Reverse</a></li></ul></li>

<li><a href="Tender_offer" title="Tender offer">Tender offer</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%;line-height:1.3em;"><a href="Leverage_(finance)" title="Leverage (finance)">Leverage</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul>

<li><a href="Debtor-in-possession_financing" title="Debtor-in-possession financing">Debtor-in-possession financing</a></li>

<li><a href="Dividend_recapitalization" title="Dividend recapitalization">Dividend recapitalization</a></li>

<li><a href="Financial_sponsor" title="Financial sponsor">Financial sponsor</a></li>

<li><a href="Leveraged_buyout" title="Leveraged buyout">Leveraged buyout</a></li>

<li><a href="Leveraged_recapitalization" title="Leveraged recapitalization">Leveraged recapitalization</a></li>

<li><a href="High-yield_debt" title="High-yield debt">High-yield debt</a></li>

<li><a href="Private_equity" title="Private equity">Private equity</a></li>

<li><a href="Project_finance" title="Project finance">Project finance</a></li></ul>

</div></td></tr></tbody></table><div></div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%;line-height:1.3em; text-align:left;"><a href="Valuation_(finance)" title="Valuation (finance)">Valuation</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Accretion/dilution_analysis" title="Accretion/dilution analysis">Accretion/dilution analysis</a></li>

<li><a href="Adjusted_present_value" title="Adjusted present value">Adjusted present value</a></li>

<li><a href="Associate_company" title="Associate company">Associate company</a></li>

<li><a href="Business_valuation" title="Business valuation">Business valuation</a></li>

<li><a href="Conglomerate_discount" title="Conglomerate discount">Conglomerate discount</a></li>

<li><a href="Cost_of_capital" title="Cost of capital">Cost of capital</a>

<ul><li><a href="Weighted_average_cost_of_capital" title="Weighted average cost of capital">Weighted average</a></li></ul></li>

<li><a href="Discounted_cash_flow" title="Discounted cash flow">Discounted cash flow</a></li>

<li><a href="Economic_value_added" title="Economic value added">Economic value added</a></li>

<li><a href="Enterprise_value" title="Enterprise value">Enterprise value</a></li>

<li><a href="Fairness_opinion" title="Fairness opinion">Fairness opinion</a></li>

<li><a href="Financial_modeling" title="Financial modeling">Financial modeling</a></li>

<ul><li><a href="Free_cash_flow_to_equity" title="Free cash flow to equity">Free cash flow to equity</a></li></ul></li>

<li><a href="Market_value_added" title="Market value added">Market value added</a></li>

<li><a href="Minority_interest" title="Minority interest">Minority interest</a></li>

<li><a href="Mismarking" title="Mismarking">Mismarking</a></li>

<li><a href="Modigliani%E2%80%93Miller_theorem" title="Modigliani–Miller theorem">Modigliani–Miller theorem</a></li>

<li><a href="Net_present_value" title="Net present value">Net present value</a></li>

<li><a href="Real_options_valuation" title="Real options valuation">Real options</a></li>

<li><a href="Residual_income_valuation" title="Residual income valuation">Residual income</a></li>

<li><a href="Stock_valuation" title="Stock valuation">Stock valuation</a></li>

<li><a href="Sum-of-the-parts_analysis" title="Sum-of-the-parts analysis">Sum-of-the-parts analysis</a></li>

<li><a href="Tax_shield" title="Tax shield">Tax shield</a></li>

<li><a href="Terminal_value_(finance)" title="Terminal value (finance)">Terminal value</a></li>

<li><a href="Valuation_using_multiples" title="Valuation using multiples">Valuation using multiples</a></li></ul>

</div></td></tr><tr><td class="navbox-abovebelow" colspan="2"><div>

<ul><li><span class="noviewer" typeof="mw:File"><span title="List-Class article"></span></span> <a href="List_of_investment_banks" title="List of investment banks">List of investment banks</a></li>

<li><span class="noviewer" typeof="mw:File"><span title="List-Class article"></span></span> <a href="Outline_of_finance" title="Outline of finance">Outline of finance</a></li></ul>

</div></td></tr></tbody></table></div>

<div class="navbox-styles"></div><div role="navigation" class="navbox" aria-labelledby="Debt127" style="padding:3px"><table class="nowraplinks mw-collapsible autocollapse navbox-inner" style="border-spacing:0;background:transparent;color:inherit"><tbody><tr><th scope="col" class="navbox-title" colspan="2"><div id="Debt127" style="font-size:114%;margin:0 4em"><a href="Debt" title="Debt">Debt</a></div></th></tr><tr><th scope="row" class="navbox-group" style="width:1%">Instruments</th><td class="navbox-list-with-group navbox-list navbox-odd hlist" style="width:100%;padding:0"><div style="padding:0 0.25em"></div><table class="nowraplinks navbox-subgroup" style="border-spacing:0"><tbody><tr><th scope="row" class="navbox-group" style="width:1%;font-weight:normal;"><a href="Bond_(finance)" title="Bond (finance)">Bonds</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Corporate_bond" title="Corporate bond">Corporate</a></li>

<li><a href="Debenture" title="Debenture">Debenture</a></li>

<li><a href="Government_bond" title="Government bond">Government</a></li>

<li><a href="Municipal_bond" title="Municipal bond">Municipal</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%;font-weight:normal;"><a href="Loan" title="Loan">Loans</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Business_loan" title="Business loan">Business loan</a></li>

<li><a href="Credit" title="Credit">Consumer lending</a></li>

<li><a href="Loan_shark" title="Loan shark">Loan shark</a></li>

<li><a href="Interest-only_loan" title="Interest-only loan">Interest-only</a></li>

<li><a href="Negative_amortization" title="Negative amortization">Negative amortization</a></li>

<li><a href="Payday_loan" title="Payday loan">Payday loan</a></li>

<li><a href="Predatory_lending" title="Predatory lending">Predatory lending</a></li>

<li><a href="Usury" title="Usury">Usury</a></li>

<li><a href="Vendor_finance" title="Vendor finance">Vendor finance</a></li></ul>

</div></td></tr></tbody></table><div></div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Management</th><td class="navbox-list-with-group navbox-list navbox-odd hlist" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Bankruptcy" title="Bankruptcy">Bankruptcy</a></li>

<li><a href="Debt_consolidation" title="Debt consolidation">Consolidation</a></li>

<li><a href="Debt_management_plan" title="Debt management plan">Management plan</a></li>

<li><a href="Debt_relief" title="Debt relief">Relief</a> (<a href="History_of_debt_relief" title="History of debt relief">history</a>)</li>

<li><a href="Debt_snowball_method" title="Debt snowball method">Debt snowball method</a></li>

<li><a href="Debtor-in-possession_financing" title="Debtor-in-possession financing">Debtor-in-possession (DIP) financing</a></li>

<li><a href="Negative_equity" title="Negative equity">Negative equity</a></li>

<li><a href="Financial_literacy" title="Financial literacy">Financial literacy</a></li>

<li><a href="Loan_guarantee" title="Loan guarantee">Loan guarantee</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Debt_collection" title="Debt collection">Collection</a> <b>·</b> <a href="Debt_evasion" title="Debt evasion">Evasion</a></th><td class="navbox-list-with-group navbox-list navbox-even hlist" style="width:100%;padding:0"><div style="padding:0 0.25em">

<li><a href="Charge-off" title="Charge-off">Charge-off</a></li>

<li><a href="Debt_compliance" title="Debt compliance">Compliance</a></li>

<li><a href="Debt_bondage" title="Debt bondage">Debt bondage</a></li>

<li><a href="Debt_crisis" title="Debt crisis">Debt crisis</a>

<li><a href="Debtors'_prison" title="Debtors' prison">Debtors' prison</a></li>

<li><a href="Default_(finance)" title="Default (finance)">Default</a>

<ul><li><a href="Sovereign_default" title="Sovereign default">Sovereign default</a></li></ul></li>

<li><a href="Distraint" title="Distraint">Distraint</a></li>

<li><a href="Garnishment" title="Garnishment">Garnishment</a></li>

<li><a href="Insolvency" title="Insolvency">Insolvency</a></li>

<li><a href="Interest" title="Interest">Interest</a>

<ul><li><a href="Interest_expense" title="Interest expense">Interest expense</a></li>

<li><a href="Interest_rate" title="Interest rate">Interest rate</a></li></ul></li>

<li><a href="Promissory_note" title="Promissory note">Promissory note</a></li>

<li><a href="Phantom_debt" title="Phantom debt">Phantom debt</a></li>

<li><a href="Strategic_default" title="Strategic default">Strategic default</a></li>

<li><a href="Tax_refund_interception" title="Tax refund interception">Tax refund interception</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="Bond_market" title="Bond market">Markets</a></th><td class="navbox-list-with-group navbox-list navbox-odd hlist" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Consumer_debt" title="Consumer debt">Consumer</a></li>

<li><a href="Corporate_bond" title="Corporate bond">Corporate</a>

<li><a href="Corporate_debt_bubble" title="Corporate debt bubble">Corporate debt bubble</a></li></ul></li>

<li><a href="Debt-trap_diplomacy" title="Debt-trap diplomacy">Diplomacy</a></li>

<li><a href="Government_debt" title="Government debt">Government debt</a>

<li><a href="Government_budget_balance" title="Government budget balance">Government budget balance</a></li>

<li><a href="Unfunded_mandate" title="Unfunded mandate">Unfunded mandate</a></li></ul></li>

<li><a href="Medical_debt" title="Medical debt">Medical</a></li>

<li><a href="Municipal_bond" title="Municipal bond">Municipal</a></li>

<li><a href="Venture_debt" title="Venture debt">Venture</a></li>

<li><a href="Debt_buyer_(United_States)" title="Debt buyer (United States)">Buyer</a></li>

<li><a href="Deposit_account" title="Deposit account">Deposit account</a></li>

<li><a href="Fixed_income" title="Fixed income">Fixed income</a></li>

<li><a href="Money_market" title="Money market">Money market</a></li>

<li><a href="Securitization" title="Securitization">Securitization</a></li></ul>

</div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Economics</th><td class="navbox-list-with-group navbox-list navbox-even hlist" style="width:100%;padding:0"><div style="padding:0 0.25em">

<ul><li><a href="Consumer_leverage_ratio" title="Consumer leverage ratio">Consumer leverage ratio</a></li>

<li><a href="Debt-to-GDP_ratio" title="Debt-to-GDP ratio">Debt-to-GDP ratio</a></li>

<li><a href="Debt-to-income_ratio" title="Debt-to-income ratio">Debt-to-income ratio</a>

<ul><li><a href="List_of_countries_by_household_debt" title="List of countries by household debt">List of countries by household debt</a></li></ul></li>

<li><a href="Debt_monetization" title="Debt monetization">Debt monetization</a></li>

<li><a href="Global_debt" title="Global debt">Global debt</a></li>

<li><a href="External_debt" title="External debt">External</a>

<li><a href="Internal_debt" title="Internal debt">Internal</a></li>

<li><a href="Odious_debt" title="Odious debt">Odious debt</a></li>

<li><a href="Leverage_(finance)" title="Leverage (finance)">Leverage</a></li></ul>

</div></td></tr></tbody></table></div>

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</style></div><div role="navigation" class="navbox authority-control" aria-labelledby="Authority_control_databases_frameless&#124;text-top&#124;10px&#124;alt=Edit_this_at_Wikidata&#124;link=https&#58;//www.wikidata.org/wiki/Q1364290#identifiers&#124;class=noprint&#124;Edit_this_at_Wikidata869" style="padding:3px"><table class="nowraplinks hlist mw-collapsible autocollapse navbox-inner" style="border-spacing:0;background:transparent;color:inherit"><tbody><tr><th scope="col" class="navbox-title" colspan="2"><div id="Authority_control_databases_frameless&#124;text-top&#124;10px&#124;alt=Edit_this_at_Wikidata&#124;link=https&#58;//www.wikidata.org/wiki/Q1364290#identifiers&#124;class=noprint&#124;Edit_this_at_Wikidata869" style="font-size:114%;margin:0 4em">Authority control databases </div></th></tr><tr><th scope="row" class="navbox-group" style="width:1%">National</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"><ul><li><span class="uid"><a rel="nofollow" class="external text" href="https://d-nb.info/gnd/4117280-2">Germany</a></span></li><li><span class="uid"><span class="rt-commentedText tooltip tooltip-dotted" title="Debt relief"><a rel="nofollow" class="external text" href="https://id.loc.gov/authorities/sh85036133">United States</a></span></span></li><li><span class="uid"><a rel="nofollow" class="external text" href="https://www.nli.org.il/en/authorities/987007543359105171">Israel</a></span></li></ul></div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Other</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"><ul><li><span class="uid"><a rel="nofollow" class="external text" href="https://lux.collections.yale.edu/view/concept/6d085d08-8714-468a-a774-9c0432d947a2">Yale LUX</a></span></li></ul></div></td></tr></tbody></table></div></div><div><div class="zim-footer">

This article is issued from <a class="external text" title="Last edited on 2025-07-14" href="https://en.wikipedia.org/wiki/?title=Debt_restructuring&oldid=1300412319">Wikipedia</a>. The text is available under <a class="external text" href="https://creativecommons.org/licenses/by-sa/4.0/deed.en">Creative Commons Attribution-Share Alike 4.0</a> unless otherwise noted. Additional terms may apply for the media files.

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