assumption of debt

USAGE SUMMARY

The phrase 'assumption of debt' is correct and usable in written English.
You can use it when referring to a situation where a company or other entity takes on the responsibility for another company's or entity's debt. For example: "The merger included the assumption of debt from both companies, meaning the new entity was liable for a larger amount of debt than either of the original companies had separately."

✓ Grammatically correct

News & Media

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

56 human-written examples

They do not include an assumption of debt.

The New York Times

The transaction value includes the assumption of debt.

The New York Times

Including assumption of debt, the deal is valued at about $239 million.

The New York Times

The deal included the assumption of debt from the parent; further financial terms were not disclosed.

The New York Times

Including the assumption of debt, Logitech put the total value of the deal at $125 million.

The New York Times

The purchase price includes the assumption of debt and technology, 3M said.

The New York Times

Including the assumption of debt, the transaction is valued at $1.3 billion.

The New York Times

Including the assumption of debt, the buyout is still valued at a total of $4.7 billion.

The New York Times

The deal is valued at roughly $369 million, including Sycamore's assumption of debt.

The New York Times

Including the assumption of debt, the buyout is still valued at $4.7 billion.

The New York Times

Including the assumption of debt, the deal is valued at $4.3 billion.

The New York Times

Expert writing Tips

Best practice

When using the phrase "assumption of debt", ensure it is clear which entity is assuming the debt and from whom. Providing specific details enhances clarity and avoids ambiguity.

Common error

Avoid using "assumption of debt" when the situation involves creating new debt, rather than taking over existing debt. "Incurring debt" or "issuing bonds" would be more appropriate in such cases.

Linguistic Context

The phrase "assumption of debt" functions as a noun phrase, typically used as an object or complement within a sentence. It describes the act of taking on the responsibility for another party's financial obligations. Ludwig examples show its use in contexts like mergers and acquisitions.

Expression frequency: Very common

Frequent in

News & Media

78%

Formal & Business

22%

Science

0%

Less common in

Academia

0%

Encyclopedias

0%

Reference

0%

Ludwig's WRAP-UP

The phrase "assumption of debt" is a noun phrase referring to the act of taking on responsibility for someone else's debt. Ludwig AI confirms its grammatical correctness and frequent use in financial and business contexts. It's crucial to use this phrase accurately, particularly in describing mergers, acquisitions, and other financial transactions, avoiding confusion with the creation of new debt. Key alternatives include "debt assumption" and "taking on debt". The phrase is most commonly found in news and formal business contexts.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

debt assumption

A slightly more concise phrasing that reverses the order of the words.

taking on debt

Focuses on the action of incurring the debt, rather than the formal assumption.

taking over liabilities

Focuses on the act of gaining control or responsibility for existing liabilities.

debt transfer

Highlights the shifting of the debt from one party to another.

acceptance of financial responsibility

Places emphasis on the agreement to be financially accountable.

liability acceptance

Uses more formal and legalistic terminology to denote the acceptance of financial responsibility.

financial obligation takeover

Highlights one entity taking control of another's financial obligations.

debt encumbrance

Emphasizes the burden or obligation created by assuming the debt.

assuming financial obligations

Broader term encompassing all types of financial liabilities, not just debt.

balance sheet absorption

Describes how debt appears on the balance sheet after it is assumed.

FAQs

How is "assumption of debt" used in financial transactions?

In financial transactions, "assumption of debt" refers to the agreement by one party to take over the responsibility for another party's existing debt. This often occurs during mergers, acquisitions, or restructurings.

What does "including the assumption of debt" mean in a deal's valuation?

When a deal's valuation is stated as "including the assumption of debt", it means the total price paid by the acquirer accounts for the existing debts of the acquired company, which the acquirer is now responsible for. This differs from the cash or stock paid directly to the selling shareholders.

What are some alternatives to "assumption of debt"?

You can use alternatives such as "debt assumption", "taking on debt", or "liability acceptance" depending on the context.

Why is "assumption of debt" important in mergers and acquisitions?

"Assumption of debt" is a critical factor in M&A because it directly impacts the acquiring company's financial health and the overall valuation of the transaction. Understanding the amount and terms of the debt assumed is essential for assessing the deal's risks and benefits.