Definition 1
A series of transactions where debts are exchanged between two entities. For example, a corporation may swap commercial paper for a government's municipal bonds. These swaps can occur for a variety of reasons, but the main reason is for profit.

Definition 2
Conversion of old debt to either new debt or new equity. Debt swaps can be performed by a company for purposes of avoiding bankruptcy, reorganizing debts, or gaining a more favorable repayment schedule.

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