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.

Feb 1, 2026 · Defeasance is a financial strategy used to set aside funds for a debt without paying the full balance to the lender right away. A borrower uses a portfolio of safe assets to cover the cost of the …

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 the same …

What is Defeasance and How Does it Work? Defeasance refers to the replacement of the collateral of a loan with securities (generally fixed-rate government bonds) that will offer a lender an equivalent return.

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 …

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

Feb 20, 2020 · 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 …

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

4 days ago · Buried in those documents is something called a defeasance clause, and it’s one of the most important pieces of your whole mortgage agreement. In plain terms, a defeasance clause says …

Jun 12, 2024 · 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 collateral—typically a portfolio of U.S. …