When a company wants to restructure its debt and equity mix to better position itself for long-term success, it may consider issuing a debt/equity or equity/debt swap.
In the case of an equity-for-debt swap, all specified shareholders are given the right to exchange their stock for a predetermined amount of debt in the same company. Bonds are usually the type of debt that is offered.
A debt/equity swap works essentially in the opposite manner: debt is exchanged for a pre-determined amount of stock. After the swap takes place, part or all of the one asset class will …
