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Defeasance is a technique by which a debtor unit removes liabilities from its balance sheet by pairing them with financial assets, the income and value of which are sufficient to ensure that all debt service payments are met.

Defeasance may be carried out by placing the paired assets and liabilities in a separate account within the institutional unit concerned or by transferring them to another unit.

Source Publication:
IMF, 2003, External Debt Statistics: Guide for Compilers and Users – Appendix 1. Special financial instruments and transactions: classifications, IMF, Washington DC.


Statistical Theme: Financial statistics

Created on Friday, August 29, 2003