BizTerm Definition
Recapitalization
Full Definition

Companies change the structure of its debt and equity because they have too much debt and too little equity or because interest rates have dropped. A recapitalization is akin to a mortgage refinancing for an individual. Typically, when a company uses an IPO to recapitalize, it uses the proceeds to pay off some of its debt and replaces the remaining debt with new debt obtained on more favorable terms.


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