highly geared

highly geared
highly geared ˌhighly ˈgeared , ˌhighly ˈleveraged adjective FINANCE
1. having a lot of debt in relation to Share This is important when considering the cost of repaying debt in relation to paying dividend S to shareholder S, and in questions of ownership of the company:

• Many firms are highly geared, having borrowed to expand their businesses. Now, with incomes falling, interest payments are almost impossible to meet.

• There still are many highly leveraged companies that are close to defaulting.

2. a highly leveraged or highly geared loan etc is one where a lot of money is borrowed in relation to the amount of capital already held by the borrower:

• Highly geared first-time buyers were especially at risk when interest rates began rising.

• a bank that lent money to finance a highly leveraged transaction that failed

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highly geared UK US adjective UK (US highly leveraged) FINANCE
used to describe a company that has a large amount of debt compared to its share capital, (= money in shares) or the structure of such a company's capital: »

Companies with high debts are 'highly geared', and face financial difficulties if their profits fall or interest rates rise.

»

The company's board said it would not support the highly leveraged capital structure of the proposed buyout offer.

used to describe a person who has borrowed a large amount of money compared to their income or the amount of capital they already have: »

US homes are about as strongly rated as UK ones but the US consumer is even more highly geared than the UK one.


Financial and business terms. 2012.

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Look at other dictionaries:

  • highly geared — (of a company or its capital) having a high ratio of borrowing in relation to owners capital, or of debt to equity • • • Main Entry: ↑gear …   Useful english dictionary

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  • leveraged — lev‧er‧aged [ˈliːvərɪdʒd ǁ ˈle , ˈliː ] adjective FINANCE 1. a leveraged company is financed by a high level of borrowing in relation to its share capital (= the money it has from selling its shares ) : • The company is profitable even though it… …   Financial and business terms

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  • gearing — capital gearing; = equity gearing; = financial gearing; = leverage The relationship between the funds provided to a company by ordinary share holders and the long term funds with a fixed interest charge, such as debentures and preference shares.… …   Accounting dictionary

  • gearing — / gɪərɪŋ/ noun the act of borrowing money at fixed interest which is then used to produce more money than the interest paid COMMENT: High gearing (when a company is said to be ‘highly geared’) indicates that the level of borrowings is high when… …   Dictionary of banking and finance

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