Scaling down. Cutting down or reducing proportionately or on a scale, as scaling down interest.
If a company has two or more issues of bonds not bearing the same rate of interest and in a
reorganization of the company or a refunding of its bonds the rates of interest on the bonds are
reduced proportionately the operation of reducing the interest is called scaling down the interest.
The term scaling down does not apply when there is only one issue of bonds upon which the rate
of interest is to be reduced, unless the rate of interest on this issue is to be reduced a certain
amount at the end of each successive specified period. If the rate of interest on a single issue of
bonds is simply made lower without provision for a further lowering the operation is described as
reducing or cutting down the interest.