Corporate Refinancing

What Does it Mean?
The process through which a company reorganizes its debt obligations by replacing or restructuring existing debts. Refinancing may also involve issuing equity to pay off a percentage of debt.

Debt is replaced or refunded by a company with money that is raised by issuing or creating other borrowing. In restructuring, a company works with its creditor to change the terms of a loan; these terms can include the reduction of interest rates, the improvement of covenants or the extension of the loan's terms.

For investor...

It is the process through which a company reorganizes its debt obligations by replacing or restructuring existing debts. Refinancing may also involve issuing equity to pay off a percentage of debt.

Debt is replaced or refunded by a company with money that is raised by issuing or creating other borrowing. In restructuring, a company works with its creditor to change the terms of a loan; these terms can include the reduction of interest rates, the improvement of covenants or the extension of the loan's terms.

Corporate refinancing will often come about if a company is unable to meet its current obligations and needs to restructure the terms of its existing debt arrangement. This usually involves lowering the interest rate and extending the time to maturity. This happens most often when a company is near bankruptcy or is in Chapter 11 bankruptcy.

Refinancing will also occur when interest rates have fallen in the market, as the lower current market rates allows a company to cut down on the overall costs of debt a company faces. One way a company can achieve this is by calling its redeemable or callable bonds, then reissuing them at a lower rate of interest.

Account Reconcilement

What Does it Mean?

Account reconcilement is the process of confirming that two separate records of transactions in an account are equal. This can happen internally within a bank or broker, for example, as between general ledger entries and individual account records.

Reconciling also occurs when a customer of a bank or broker confirms that their personal records match what is reported on their periodic statements. Account reconcilement can also refer to balancing the books and records of a business with software programs and data entries.

For Investor....

Account reconciliation within financial institutions is a key regulatory and compliance function, and it is a primary focus for outside regulators in their routine audits of the firm. Customers of these firms should also keep an accurate record and report discrepancies promptly..

With the advent of computer systems to record transactions and client positions, reconciling often amounts to fixing small discrepancies of a few dollars, or even pennies, between one source and another. The longer an error goes uncovered, the more difficult it will be to reconcile the two records.