Bankruptcy

Bankruptcy

Bankruptcy

When an individual or an organization fail to pay their debts to creditors, they may go to the bank to seek financial relief for some or all of their debts; this legal process is termed as a Bankruptcy. After a person declares himself as bankrupt a court order decides how an insolvent debtor will deal with unpaid obligations. During such times the individual is expected to pay the creditors by selling off his assets and trying to erase debts that can’t be paid. The debtor's credit rating is severely damaged during bankruptcy and his ability to borrow for years decreases drastically. (more…)
Debt Syndication

Debt Syndication

Debt Syndication

What is Debt Syndication? Debt syndication is also known as Loan syndication. This is a type of loan in which the borrower borrows the money from various lenders in the market. Majorly various corporate, governments, and individuals borrow this loan for the funding for huge projects; which can be difficult for the single lender to lend money. This happens most frequently when the borrower needs a sum that is too high for a single lender to offer or when the loan is beyond the risk exposure level of the lender. As a result, several lenders form a syndicate to provide the lender with the funding needed. The lenders in the loan syndicate share the risk and are exposed to their part of the loan only. It may be a blend of various types of loans, each with different repayment conditions that are negotiated between the lenders and the borrower during agreements. (more…)
What is Leveraged Buyout and how does it works?

What is Leveraged Buyout and how does it works?

LEVERAGED BUYOUT

A leveraged buyout (LBO) is the acquisition of a company, division, business, or collection of assets (“target”) using debt to finance a large portion of the purchase price. The remaining part of the purchase price is financed by a financial sponsor (“Sponsor”) with an equity contribution. (more…)
DEBT SECURITIES VS EQUITY SECURITIES

Debt Securities vs Equity Securities

Debt Securities vs Equity Securities

Debt securities are financial assets that define the terms of a loan between an issuer (the borrower) and an investor (the lender). Equity securities are financial assets that appear to be the shares of a corporation. (more…)