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Debtholder
See: bondholder.
Debt instrument
An asset requiring fixed dollar payments, such as a government or corporate bond.
Debt leverage
The amplification of the return earned on equity when an investment or firm is financed partially with
borrowed money.
Debt limitation
A bond covenant that restricts in some way the firms ability to incur additional indebtedness.
Debt market
The market for trading debt instruments.
Debtor in possession
A firm that is continuing to operate under Chapter 11 bankruptcy process.
Debtor-in-possession financing
New debt obtained by a firm during the Chapter 11 bankruptcy process.
Debt ratio
Total debt divided by total assets.
Debt relief
Reducing the principal and/or interest payments on L.D.C. loans.
Debt securities
IOUs created through loan-type transactions - commercial paper, bank CDs, bills, bonds, and other
instruments.
Debt service
Interest payment plus repayments of principal to creditors, that is, retirement of debt.
Debt-service coverage ratio
Earnings before interest and income taxes plus one-third rental charges, divided by interest expense plus
one-third rental charges plus the quantity of principal repayments divided by one minus the tax rate.
Debt service parity approach
An analysis wherein the alternatives under consideration will provide the firm with the exact same schedule
of after-tax debt payments (including both interest and principal).
Debt swap
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