LGFVs can continue to meet existing debt obligations as long as they can borrow new funds.
FORBES: How Can China Save Europe When It's Defaulting On Its Own Debt?
In the 1995 Kobe-Kansai earthquake, local governments provided interest subsidies residents servicing pre-existing debt.
Prices on bonds issued by smaller banks are usually based on existing debt in the market.
Now the bulk of that borrowing is to fund the government's deficit, rather than to refinance existing debt.
CDOs are being used to transform existing debt instruments that are accurately priced into new ones that are overvalued.
First of all, even if the government could not increase its indebtedness, it could still service its existing debt.
FORBES: Democrats Want To Raise Debt Ceiling? GOP Should Demand Growth Initiatives
Proceeds will be used to refinance existing debt and for general corporate purposes.
The luxury retailer, which said it will use the proceeds to refinance existing debt, was down 1.8% late Friday.
As a consequence they may demand high returns for rolling over existing debt.
Some said they intended to use the funds to refinance existing debt, but others indicated they would expand their businesses.
In addition, to narrow the competitiveness gap, all members should be able to refinance existing debt at the same interest rate.
FORBES: Soros: Euro Crisis Is Lethal, A Break Up Is Possible
It lightens the burden of existing debt both for the Treasury and for its kindred spirits, homeowners in over their heads.
If creditors lose faith in their borrowers, they will demand the repayment of existing debt or refuse to renew old loans.
With borrowing rates for high-yield issuers so low, it is not surprising to again see heavy activity geared toward refinancing existing debt.
Of course, many dividend-related loans are also used to refinance existing debt.
But the government has already defaulted on most of its existing debt.
In any given period the debt stock grows by the existing debt stock (d) multiplied by r-g, less the primary budget balance (p).
Details of a rollover are still being discussed some big banks are now talking about supporting a Greek buyback of existing debt at market prices.
Over the next five years, Italy has to borrow more than 500 billion euros, simply to repay existing debt that is set to mature.
Penney can use the funds from Goldman to fund working capital, other general corporate purposes and to pay off or retire existing debt due in 2023.
FORBES: J.C. Penney Secures Fresh Financing From Goldman Sachs
Moreover, quantitative easing over the last two years has led to long-term depreciation of existing debt, and losses to its creditors, in this case China.
FORBES: Fiscal Cliff Has China Credit Agency Lowering U.S. Debt Outlook
When applied to existing debt, a rating change can result in either a windfall or hit for an investor in the value of the bonds being held.
Taking out new loans to retire existing debt may replace old creditors with newer, larger, creditors, but it can never be described as a real pay down.
That limit does not prevent rolling over existing debt that is due by issuing new debt to pay it, as that would not increase the total outstanding debt.
FORBES: Presidential Debt-Limit Deceptions And Economic Growth
Many current mortgage servicers also believe that offers to renegotiate the existing debt would be accepted by many who would otherwise be able to continue paying in full.
Developers are putting the brakes on new projects, cutting deals with tenants to keep space occupied and, if possible, extending the terms of their existing debt when it comes due.
The company assumes no pre-existing debt in the deal.
FORBES: AT&T Agrees To Buy T-Mobile For $39 Billion In Cash And Stock
Unlike loans, credit lines are often not backed by collateral and are revolving, meaning that a company can borrow up to a set limit and free up credit by paying off existing debt.
WSJ: Wells Fargo to Increase Interest Rates on Some Small-Business Credit Lines
Most lending from the euro zone and the IMF is now going to pay interest on existing debt, which will increasingly be owned by the euro zone itself, rather than fund the government's operating expenses.
应用推荐