What does deleverage mean?
Deleverage is a financial term that refers to the process of reducing or eliminating debt or financial leverage. This can be achieved by selling assets, increasing income, or restructuring debt. Deleveraging can help improve a company's credit rating, reduce financial risk, and increase its overall financial stability. The process of deleveraging can be complex and challenging, especially for companies with high levels of debt. However, it can also provide opportunities for growth and improvement. Deleverage is an important concept in finance and economics, and is used by businesses, investors, and policymakers to manage risk and make informed decisions.
verbTo reduce or eliminate debt or financial leverage, often by selling assets or increasing income.
- To reduce or eliminate debt or financial leverage, often by selling assets or increasing income.
"The company's decision to deleverage its balance sheet helped to improve its credit rating."
"The company's decision to deleverage its balance sheet helped to improve its credit rating."
"Deleveraging can be a challenging process, especially for companies with high levels of debt."
The plural form 'deleverages' is used to describe the process of reducing or eliminating debt or financial leverage for multiple entities or companies.
"The company's decision to deleverage its balance sheet helped to improve its credit rating, while also deleveraging its subsidiaries."
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of deleverage
The word 'deleverage' is derived from the verb 'leverage', which means to use assets or resources to gain an advantage. The prefix 'de-' means 'to remove or eliminate', so 'deleverage' literally means 'to remove or eliminate leverage'. The term 'deleverage' has been in use since the 1990s, and has become increasingly important in financial contexts as companies and governments seek to manage debt and financial risk.
How deleverage is actually used
Deleverage is often used in financial contexts, but can also be used in everyday language to describe reducing debt or financial obligations.