leveraged


leveraged
USA
In the context of finance, the relationship of debt to equity in a borrower's capital structure. The higher the borrower's debt, the more highly leveraged a borrower is said to be. In practice, the term “leveraged” is used when the amount of debt at the borrower is very high given the financial condition of the borrower. The lenders in leveraged finance transactions are therefore considered to take more risk than normal, and consequently charge their borrowers a higher margin. As a result, borrowers will usually wish to use leveraged finance to achieve a specific objective (such as the acquisition of a company or business) likely to generate sufficient returns to compensate for the high margin. The details of what constitutes leveraged finance (for example, the margin) varies between lenders and the companies they lend to. It will also depend on the particular features of the transaction. Leveraged loans are often used in leveraged buyouts of other companies.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

  • leveraged — lev‧er‧aged [ˈliːvərɪdʒd ǁ ˈle , ˈliː ] adjective FINANCE 1. a leveraged company is financed by a high level of borrowing in relation to its share capital (= the money it has from selling its shares ) : • The company is profitable even though it… …   Financial and business terms

  • leveraged — ˈlev(ə)rijd, ˈlēv adjective 1. : having a high proportion of debt relative to equity mismanaged, unwisely leveraged, and highly illiquid corporations N.A.Bailey 2. of the purchase of a company : made with borrowed money that is secured by the… …   Useful english dictionary

  • leveraged — adjective Date: 1953 1. having a high proportion of debt relative to equity 2. of the purchase of a company made with borrowed money that is secured by the assets of the company bought < a leveraged buyout > …   New Collegiate Dictionary

  • leveraged —    involving excessive borrowing    Especially where a predator takes over a corporation incurring debt which he hopes to service or repay out of the victim s assets:     Anyway, this investment banker specializes in leveraged buyouts ; it s the… …   How not to say what you mean: A dictionary of euphemisms

  • leveraged — le·ver·age || levÉ™rɪdÊ’ / lɪːv n. action of a lever; mechanical power supplied by a lever; influence, ability to affect or alter people or circumstances; use of borrowed money to increase the return on an investment v. use one s influence… …   English contemporary dictionary

  • leveraged — adjective use borrowed capital for (an investment), expecting the profits made to be greater than the interest payable. → leverage …   English new terms dictionary

  • leveraged — lever·aged …   English syllables

  • leveraged — /ˈlɛvərɪdʒd/ (say levuhrijd) adjective (of a company, financial transaction, etc.) demonstrating a high ratio of debt to equity …   Australian English dictionary

  • leveraged — / li:vərɪdʒ/ adjective using borrowings for finance …   Dictionary of banking and finance

  • Leveraged Buyout — Un financement d acquisition par emprunt, également désignée par le sigle LBO (pour l anglais leveraged buy out) consiste à racheter une société en ayant recours à de l endettement bancaire aussi appelé effet de levier. C est l entreprise… …   Wikipédia en Français


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