Term:
Debt-debt swap
Definition:

Swap involving the exchange of a new obligation for an existing obligation held by investors. A technique used recently in the U.S. in conjunction with original issue discount bonds as a means of realizing a capital gain on the retirement of a relatively low-coupon existing issue and at the same time achieving an interest cost saving due to special tax treatment of an original issue discount bond issued as part of such a swap.

Domain:
Finance
Source:
World Bank: Glossary of Finance and Debt
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