Investor Glossary-deleveragingInvestor Glossary-deleveragingInvestor Glossary-deleveragingInvestor Glossary-deleveragingInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Deleveraging

The HTML to link to this page
 

Deleveraging is the unwinding of debt. Companies use leveraging (i.e. borrowing) to accelerate their growth or return, however, when a company is concerned about defaulting on its obligations or concerned about rampant losses, it can use deleveraging to lower its risk of default and mitigate its losses. By deleveraging its balance sheet, a company sells off debt to lower its overall risk profile. Deleveraging can have serious financial consequences when a company tries to unwind assets that are illiquid. In this case, deleveraging may mean selling assets at a relatively steep discount. As a result, deleveraging may lead to downward pressure on security and asset prices as more and more companies and/or individuals unwind their positions during the deleveraging process.



Rate this Deleveraging definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: diluted share, real GDP, ex-dividend, FICO score, option premium, Zero Cost Collar, wholly-owned subsidiary, required rate of return, FTSE, LIBOR, labor relations, 144a, EBITDA, irrevocable trust, balance sheet, risk management, 401a, 1035 exchange, annual return, retained earnings, debt service coverage, 1031 exchange, Key Rate Duration, dividends payable, implied volatility, class C shares, quality assurance, in escrow, deferred revenue, minority interest, ex-dividend date, reverse mortgage, per diem, APR, liquidity ratio, current ratio, margin rate, cancelled check, open position, stock market close, VIX, inflation, stock split, command economy, limit order, phantom income, covered put, average price per share, deferred tax


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use