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DEBT-FOR-EQUITY SWAP

Statistics Directorate    
Definition:
A transaction in which debt of an economy is exchanged, usually at a discount, for equity in an enterprise in the same economy. Although variable in form, such arrangements usually result in the extinction of a fixed-rate liability (for example, a debt security or loan) denominated in foreign currency and the creation of an equity liability (denominated in domestic currency) to a nonresident. There may be clauses in the agreement to prevent the repatriation of capital before some specified future date.

Source Publication:
IMF, 2003, External Debt Statistics: Guide for Compilers and Users – Appendix III, Glossary, IMF, Washington DC.

Hyperlink:
http://www.imf.org/external/pubs/ft/eds/Eng/Guide/index.htm

Statistical Theme: Financial statistics

Created on Wednesday, August 27, 2003