Debt/Equity

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➡️ A debt/equity swap is a transaction in which the obligations or debts of a company or individual are exchanged for something of value, equity

➡️ In the case of a publicly traded company, this generally entails an exchange of bonds for stock

➡️ The value of the stocks and bonds being exchanged is typically determined by the market at the time of the swap

➡️   The ability of banks to convert debt into equity will provide another tool in the hands of lenders to fight non-performing assets (NPAs)
But the conversion of debt into equity is unlikely to meaningfully benefit lenders as well as borrower companies as they are already in distress or are close to distress