Debt Restructuring

Through our experience and long-term relationships with local and international banks and other financial institutions, we help our clients access financial markets and gain the best possible terms on debt restructuring.

What is debt restructuring? 

Debt restructuring is a process that involves negotiating with creditors to lower your interest rate, extend your repayment term, or reduce your loan balance. It can help you manage your debt situation more easily through smaller monthly payments, lower interest rates, or a reduction in the amount you owe.

The type of debt restructuring you need and qualify for can vary depending on your situation, needs, goals, and the type of debt you have.

When does your company need to do a debt restructuring? Here are some examples:

• • A breach of a financial covenant with lenders is an event of default and may trigger a debt restructuring.
  • Some companies seek to restructure their debt when they are facing the prospect of bankruptcy
  • A debt restructuring might include a debt-for-equity swap, in which creditors agree to cancel a portion or all of the outstanding debt in exchange for equity in the business.
  • A company seeking to restructure its debt might also renegotiate with its bondholders to “take a haircut“—meaning that a portion of the outstanding interest payments will be written off or a portion of the balance will not be repaid.
  • A company that used some short-term loans for medium- or long-term projects now needs to work with financial creditors to convert short-term loans to medium- or long-term ones.
  • A company can issue callable bonds with a feature that the issuer can redeem early in times of decreasing interest rates. This allows the issuer to restructure debt in the future because the existing debt can be replaced with new debt at a lower interest rate.
  • A company that has loans with high lending rates wants to work with its lenders to reduce interest rates on loans or extend the dates when the company’s liabilities are due to be paid, or both.
  • Many corporate restructurings involve implementing cost-cutting measures and refinancing a company’s debts.