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Naturally, debt holders often object to such changes.
The first investors to be repaid are secured debt holders, then senior bond investors, followed by subordinated debt holders.
So the financial losses to debt holders could be on the order of $1 trillion.
Evidence from the 1980s shows that private equity often took advantage of other debt holders.
"The fact remains, though, that the exchange is not binding on all debt holders.
(Debt holders rejected the offer as too low and instead pursued the bankruptcy option).
The first form is accomplished through the voluntary participation of debt holders.
General American was later acquired by Metropolitan Life Insurance, which ultimately repaid the debt holders.
For example, some of the contracts protect debt holders against losses on mortgage securities.
The deal requires approval from debt holders, various government agencies and departments.
While this would hurt subordinated debt holders, a deferral of interest payments has even broader ramifications.
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CEO of Professional Science Editing for Scientists @ prosciediting.com