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InvestHub.com's
Finance Dictionary and Glossary of Investment Terms

Defeasance  

Definition 1.

The setting aside by a borrower of cash or bonds sufficient to service the borrower's debt. Both the borrower's debt and the offsetting cash or bonds are removed from the balance sheet.
 

Definition 2.

A provision that voids a bond or loan when the borrower sets aside cash or bonds sufficient enough to service the borrower's debt.
 
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