Recapitalization
What is Recapitalization? Recapitalization is a type of corporate restructuring that aims to change a company’s capital structure. Usually, companies perform recapitalization to make their capital structure more stable or optimal. Recapitalization essentially involves exchanging one type of financing for another – debt for equity, or equity for debt. One example is when a company issues...
Insolvency
What is Insolvency? Insolvency refers to the situation in which a firm or individual is unable to meet financial obligations to creditors as debts become due. Before beginning legal insolvency proceedings, the firm or individual may get involved in making an informal arrangement with their creditors, such as crafting alternative payment options. An insolvent firm may decide...
Rating Agency
What is a Rating Agency? A rating agency is a company that assesses the financial strength of companies and government entities, especially their ability to meet principal and interest payments on their debts. The rating assigned to a given debt shows an agency’s level of confidence that the borrower will honor its debt obligations as agreed....
Bridge Loan
What is a Bridge Loan? A bridge loan is a short-term form of financing that is used to meet current obligations before securing permanent financing. It provides immediate cash flow when funding is needed but is not yet available. A bridge loan comes with relatively high interest rates and must be backed by some form...
Letter of Guarantee
What is a Letter of Guarantee? A Letter of Guarantee refers to a written commitment granted by a bank on the request of a client who has engaged in a sale agreement to purchase goods from a supplier, providing assurance that the customer will fulfill the obligations of the contract entered into with the supplier....
