Deleveraging

Deleveraging is a financial strategy aimed at reducing the overall financial leverage of a company or individual. It involves taking steps to decrease the level of debt relative to equity. Deleveraging can be pursued through actions such as paying off existing debt, selling assets to retire debt, or refinancing debt to more favorable terms. This strategy is often used to mitigate financial risk, enhance financial stability, and improve overall financial health. It stands in contrast to leveraging, where debt is increased to finance investments or activities, which can amplify returns but also increase risk.