Accounting glossary term
Debt Management
Debt management is the practice of monitoring, structuring, and servicing a company’s borrowings to support strategy while staying within prudent leverage limits.
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What is Debt Management?
Debt management is the practice of monitoring, structuring, and servicing a company’s borrowings to support strategy while staying within prudent leverage limits.
How It Works
- Track total debt, maturity profile, and covenants.
- Refinance or restructure when terms become unfavorable.
- Align debt service with cash flow generation.
Saudi Context
Saudi corporates increasingly tap sukuk markets alongside bank facilities, with SAMA-regulated banks setting covenants on leverage, DSCR, and tangible net worth.
Example
A Saudi real estate developer refinances a SAR 500 million bank facility into a 7-year sukuk, extending the maturity profile and lowering effective profit rate by 80 bps.
Related Terms
- Optimal Capital Structure