Deleveraging: Its Meaning and How It Works What 4 things can be done about deleveraging? 1. One way to deleverage is to sell off non-core assets. This can help to raise cash and reduce debt. 2. Another way to deleverage is to reduce expenses. This can be done by cutting costs and/or negotiating better terms … Read more
A syndicated loan is a loan that is provided by a group of lenders, known as a syndicate. Syndicated loans are typically used by large corporations to finance major projects such as acquisitions, expansions, or restructurings. The syndicate of lenders provides the borrower with a single loan facility that is then divided into portions, with … Read more
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
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
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
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 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. 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
“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
