Liability Management In Canada

In the context of corporate debt, 'liability management' refers to a company taking steps to manage its existing debt obligations. This often involves a combination of one or more open market repurchases, redemptions/repayments, consent solicitations, tender offers or exchange offers, and may involve other transactions. A repurchase of debt from a holder is one of the most straight-forward examples of liability management.

Liability Management Transactions

Increasingly in the last several years, the term 'liability management transaction' (LMT) has referred more specifically to creative management of debt liabilities, often by distressed companies. These commonly involve or facilitate a change in the priority of creditors (whether structurally, in lien priority or in right of payment) and/or a transfer of value from entities subject to covenant restrictions to entities with fewer restrictions. Such transactions are generally completed in compliance with the