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Leveraged Finance

Leveraged Finance Meaning:
The term leveraged finance or leverage finance is a type of financial product offered as a custom debt funding solution for private equity and corporate clients of some financial firms. It is the use of debt as opposed to equity by clients as finance for various purposes including buyout of a company, make an acquisition or repurchase shares. The form of debt this company can be raised as a leveraged loan.

Leveraged Finance Example:
Businesses considering a merger, acquisition, raising capital, IPO and large capital will most likely involve complex financing structures. Within banks such as Commonwealth Bank or ANZ they may have a team that originates, structures, arranges senior debt. This can be used for acquisitions, expansion and other purposes.