Consolidation bond

A consolidation bond (English consolidation bond ) is a form of bond , in which all liabilities are erased by issuing a bond of the issuers. As a result, the liabilities to a large number of creditors, usually on different terms, are combined in one bond. This results in a standardization ( term , interest rate , repayment ) and a summary of the liabilities. The actual debt of the company does not change in the balance sheet, since a liability for repayment of the bond capital is established to the same extent as the old liabilities are repaid by the bond capital received. The benefit is in pooling the liabilities, often reducing the number of creditors into one. Since the interest and / or repayment structures are standardized, the consolidation bond is issued as part of a consolidation ; hence its name comes from.