What Is Debt Service?

Debt service is the payments that a company must make in order to service its debt. This includes interest payments, as well as any payments that are required to repay the principal amount of the debt. Debt service can also refer to the amount of income that a company must set aside in order to … Read more

Waterfall Payment: What You Need to Know.

Everything You Should Know About Waterfall Payments What is a waterfall payment structure? A waterfall payment structure is a system for distributing payments among different levels of debt holders in a corporate debt financing. In a typical corporate debt financing, there are several levels of debt, with each level having its own interest rate and … Read more

Allowance For Credit Losses Definition.

The “Allowance for Credit Losses Definition” refers to the specific amount of money that a company sets aside in order to cover any potential losses that may occur from customers who are unable to pay their debts. This allowance is typically a percentage of the total receivables that a company has on its books. Is … Read more

What Is a Preferred Creditor?

A preferred creditor is a creditor that has a higher priority than other creditors in the event of a company bankruptcy. Preferred creditors typically include secured creditors, such as banks that have lent money to the company, and government agencies. They are typically paid before unsecured creditors, such as suppliers, in the event of a … Read more


Debt is an agreement between two parties in which one party (the borrower) agrees to provide the other party (the lender) with a sum of money, goods, or services now, and the borrower agrees to repay the lender at some future date. The terms of the agreement usually specify the amount of money to be … Read more

Corporate Debt Restructuring.

Corporate debt restructuring is the process of renegotiating the terms of one or more outstanding corporate loans in order to improve the financial situation of the borrower. This may involve extending the loan’s maturity date, lowering the interest rate, or converting the loan into equity. Corporate debt restructuring is often necessary when a company is … Read more

This Gearing Doesn’t Mean Faster or Slower.

This gearing doesn’t mean faster or slower. It just means that the company’s debt is higher than its equity. So, if the company’s assets are $1,000 and its liabilities are $500, its gearing ratio is 50%. Is high gearing good? High gearing is generally considered to be a good thing, as it allows a company … Read more

What Is Cash Available For Debt Service (CADS)?

“Cash Available for Debt Service” (CADS) is a term used to describe the amount of cash a company has available to make payments on its debt obligations. The CADS figure is important for investors to consider when assessing a company’s financial health, as it can give insights into the company’s ability to service its debt … Read more

What Is Surety?

A surety is a person or company that guarantees to pay a debt or fulfill an obligation if the original debtor or obligor fails to do so. The surety provides this guarantee to the creditor in exchange for a fee, which is usually a percentage of the total debt or obligation. What does surety mean … Read more

Debt Instrument.

A debt instrument is a financial instrument that represents a debt owed by one party to another. Debt instruments can be in the form of bonds, loans, or lines of credit. What are the four basic categories of debt instruments? There are four main categories of debt instruments: secured, unsecured, convertible, and non-convertible. Each type … Read more