DEFEASANCE Definition

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DEFEASANCE is a. the release of a debtor from the primary obligation for a debt. A legal defeasance could take place in absolute terms, i.e., the debt could cease to exist for anyone (by being forgiven or set aside), or the creditor could formally recognize that another party has taken over the primary obligation for the debt; and, b. in securities, a technique used by bond issuers to dis­charge old, low-rate debt by purchasing a smaller amount of higher-yielding U.S. Treasury debt. The Treasuries are held in trust to service the old debt being retired.

Learn new Accounting Terms

YELLOW SHEETS is a daily publication of the National Quotation Bureau that details the bid and asked prices and firms that make a market in corporate bonds traded in the over-the-counter market. Yellow Sheets are to bonds what pink sheets are to unlisted stocks.

COGAS is Cost Of Goods Available for Sale. See COST OF GOODS SOLD.

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