Equity-Debt Swap Law and Legal Definition
Equity debt swap is a type of financial restructuring whereby all specified shareholders are given the right to exchange their stock for a predetermined amount of debt in the same company. This can be in the form of bonds. This offer an investor a chance at receiving bond payments but takes away any ownership stake they have in a corporation. This helps to improve the financial situation and allows the company to make a merger or to engage in other business activities.