Lexicon

Liability management exercise

Transaction type · also called LME; liability management transaction; LMT

An out-of-court transaction, or series of transactions, that reshapes a stressed borrower's capital structure using flexibility in its existing debt documents, usually to raise liquidity, extend maturities or capture discount.

Discussed at ¶¶ 2.14–2.17 of Liability Management Exercises: Law and Practice.