A Bond Tender Offer (BTO), also called a Debt Tender Offer (DTO), is a corporate finance term denoting the process of a firm retiring its debt by making an offer to its bondholders to repurchase a specific number of bonds at a specified price and specified time. Firms use these offers to refinance or restructure their current capital structure.[1][2]

On the open market, many debt securities trade below their face value, thus making repurchase of debt attractive to a firm. In the case of a BTO, the firm offers to buy bonds above their market value, although still below face value. However, these are generally non-negotiable with the offeree since only a minimum amount of the bond repurchases are allowed.[2]

See also

References

  1. ^ "Debt Tender Offer". Investopedia.
  2. ^ a b Kuhlmann, Shirley (Mar 4, 2009). "Corporate and Securities Law Alert: The Anatomy of a Debt Tender Offer". Pepper Hamilton. Retrieved Dec 20, 2019.
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