Defeasance - Wikipedia Defeasance (or defeazance) (French: défaire, to undo), in law, is an instrument which defeats the force or operation of some other deed or estate; as distinguished from condition, that which in the same deed is called a condition is a defeasance in another deed [1]
What is Defeasance and How Does it Work? - Multifamily Loans What is Defeasance and How Does it Work? Defeasance refers to the replacement of the collateral of a loan with securities (generally fixed-rate government bonds) that will offer a lender an equivalent return
Defeasance Clause: How it Works | JPMorgan Chase What is defeasance? A defeasance clause is a provision in a commercial real estate loan agreement that lets a borrower replace the asset securing the loan with substitute collateral—typically a portfolio of U S government bonds—that provides similar cash flows over the loan’s remaining term
Check Defeasance Guide: Everything You Need to Know - Hiveage Defeasance requires reserving cash or bonds to meet the debt, which effectively cancels the obligation To achieve this, borrowers replace the original collateral of a mortgage with securities, typically by acquiring government securities and placing them in an escrow account administered by a bank
3. 8 Debt defeasance - Viewpoint A borrower may enter into a defeasance, or refunding, arrangement with its lenders in an effort to derecognize its debt liability A defeasance arrangement is generally a legal defeasance of the borrower’s liability to the lender, not a payment by the borrower to the lender
Defeasance - Overview, How It Works, Advantages Typically, defeasance is a process through which a lender’s claim on collateral is eliminated The borrower replaces the collateral with another security that is relatively risk-free, such as Treasury bills, or with a portfolio of low-risk securities