leveraged

leveraged
USA
In the context of finance, the relationship of debt to equity in a borrower's capital structure. The higher the borrower's debt, the more highly leveraged a borrower is said to be. In practice, the term “leveraged” is used when the amount of debt at the borrower is very high given the financial condition of the borrower. The lenders in leveraged finance transactions are therefore considered to take more risk than normal, and consequently charge their borrowers a higher margin. As a result, borrowers will usually wish to use leveraged finance to achieve a specific objective (such as the acquisition of a company or business) likely to generate sufficient returns to compensate for the high margin. The details of what constitutes leveraged finance (for example, the margin) varies between lenders and the companies they lend to. It will also depend on the particular features of the transaction. Leveraged loans are often used in leveraged buyouts of other companies.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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  • leveraged — lev‧er‧aged [ˈliːvərɪdʒd ǁ ˈle , ˈliː ] adjective FINANCE 1. a leveraged company is financed by a high level of borrowing in relation to its share capital (= the money it has from selling its shares ) : • The company is profitable even though it… …   Financial and business terms

  • leveraged — ˈlev(ə)rijd, ˈlēv adjective 1. : having a high proportion of debt relative to equity mismanaged, unwisely leveraged, and highly illiquid corporations N.A.Bailey 2. of the purchase of a company : made with borrowed money that is secured by the… …   Useful english dictionary

  • leveraged — adjective Date: 1953 1. having a high proportion of debt relative to equity 2. of the purchase of a company made with borrowed money that is secured by the assets of the company bought < a leveraged buyout > …   New Collegiate Dictionary

  • leveraged —    involving excessive borrowing    Especially where a predator takes over a corporation incurring debt which he hopes to service or repay out of the victim s assets:     Anyway, this investment banker specializes in leveraged buyouts ; it s the… …   How not to say what you mean: A dictionary of euphemisms

  • Leveraged Buyout — Un financement d acquisition par emprunt, également désignée par le sigle LBO (pour l anglais leveraged buy out) consiste à racheter une société en ayant recours à de l endettement bancaire aussi appelé effet de levier. C est l entreprise… …   Wikipédia en Français

  • Leveraged buyout — Un financement d acquisition par emprunt, également désignée par le sigle LBO (pour l anglais leveraged buy out) consiste à racheter une société en ayant recours à de l endettement bancaire aussi appelé effet de levier. C est l entreprise… …   Wikipédia en Français

  • leveraged buyout — leveraged buy·out / bī ˌau̇t/ n: the acquisition of a company usu. by members of its own management using debt to finance the purchase of equity with debt to be paid by future profits or sale of company assets Merriam Webster’s Dictionary of Law …   Law dictionary

  • leveraged finance — Finance where the level of debt provided is more than would be considered normal. The lenders in leveraged finance transactions are therefore considered to take more risk than normal, and consequently charge their borrowers a higher margin. As a… …   Law dictionary

  • leveraged takeover — ➔ takeover * * * leveraged takeover UK US noun [C] ► FINANCE a situation in which a company buys another by using borrowed money: »He launched his proposal for the leveraged takeover last month …   Financial and business terms

  • leveraged buy out — (LBO) A transaction where a purchaser uses the assets of the corporation to be acquired (target) as collateral for the loan to buy the stock of the target. LBOs stand a significant risk of bankruptcy because, after the transaction, they have… …   Glossary of Bankruptcy

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