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Asset-Light Debt

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Dictionary Says

Definition of 'Asset-Light Debt'

A corporate debt that has less than the usual amount of collateral, which is normally 30% or more of the company's value. With asset-light debt, that number is much lower, with many companies' collateralized debt percentage falling far below the previous standards. It can sometimes even be at zero.
Investopedia Says

Investopedia explains 'Asset-Light Debt'

A company may use this strategy by creating a a holding company. The company would then use the holding company to issue debt and pay off the debt through dividends from the original company.

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