New issue of debentures vs. a reissue!!?

Question

Why do companies reissue their debentures sometimes, instead of holding a new issue of debentures??

Answer 1

- Improve presentation. (1)
Reissues are to reflect adjusted share prices in the net asset value of the company showing debt at par value and debt at fair value.

Overlapping loans which could present the entity as over borrowing. Consider presentation of basic and diluted EPS.

- Priorty over first gains. (2)
The debenture holder has the same rights and priorities as if the debentures had never been redeemed.

- To facilitate borrowings without incurring additional administrative costs of new issues. (3)

- Restructure debt to equity ratio
Should interest rates drop, the company can choose to call back the debentures and reissue debt at a lower interest rate to restructure debt and incur a lower cost of financing from the public.