# Recapitalization

*Corporate Finance & M&A — Finicade finance glossary*

A recapitalisation changes the mix of debt and equity without changing the business — swapping one for the other, or issuing debt to buy back shares. It's done to lower the cost of capital, defend against a takeover, or return cash. In distress it means something harsher: creditors exchange debt for equity, which usually leaves existing shareholders with very little.

**Also known as:** recap, balance sheet restructuring

**Related terms:** [Capital Structure](https://finicade.com/glossary/capital-structure), [Dividend Recap](https://finicade.com/glossary/dividend-recap), [Leveraged Buyout (LBO)](https://finicade.com/glossary/lbo), [Share Buyback](https://finicade.com/glossary/share-buyback), [Debt-to-Equity Ratio](https://finicade.com/glossary/debt-to-equity-ratio)

Source: https://finicade.com/glossary/recapitalization