Sep 11, 2025 · What Is Defeasance? Defeasance is a financial strategy where a borrower nullifies debt by allocating adequate cash or bonds, removing it from the balance sheet.

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 …

Guide to Defeasance and its definition. We explain it with an example and compare it with yield maintenance and prepayment.

Dec 6, 2025 · Defeasance is a financial mechanism used to retire a debt obligation without physically paying off the underlying liability immediately. The strategy allows the borrowing …

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 …

Apr 3, 2025 · What is defeasance? Defeasance refers to a legal concept or clause used in financial contracts, typically in relation to bonds or loans, that allows the borrower to cancel or …

Jun 12, 2024 · 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 …

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 …

The meaning of DEFEASANCE is the termination of a property interest in accordance with stipulated conditions (as in a deed).

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 …