The main difference between direct private long-term debt financing and public issues of debt is that it is easier to renegotiate a term loan or private placement in the event of a default.

Question

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Direct private long-term debt financing, such as term loans or private placements, typically involves fewer lenders and more personalized agreements, making it easier to renegotiate terms in the event of a default compared to public issues of debt, which are more widely held and subject to stricter regulatory requirements.

The Main Difference Between Direct Private Long-Term Debt Financing and Public