Credit events include bankruptcies or violating a bond indenture or other loan agreement. Any decline in the borrower's credit rating can trigger the swap. Credit events always refer to the condition of the borrower pertaining to the underlying asset and not to either the lender or the purchaser of the swap.
Investment dictionary. Academic. 2012.
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credit event — USA An event or circumstance specified in a credit default swap confirmation which obligates the credit protection seller to make certain payments to the credit protection buyer. The credit events most commonly specified are failure of the… … Law dictionary
Credit event — A credit event is the financial term used to describe either: A general default event related to a legal entity s previously agreed financial obligation. In this case, a legal entity fails to meet its obligation on any significant financial… … Wikipedia
credit event — A term used in credit swap and some other credit related contracts. The specified credit event in each contract is defined by the parties to suit their particular needs. Typical specified credit events are bankruptcy, insolvency, credit rating… … Financial and business terms
credit event — noun A significant default on a financial instrument or some other financial occurrence, such as bankruptcy, restructuring, repudiation, or moratorium, or failure to pay some other obligation, such as taxes … Wiktionary
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credit protection seller — USA credit protection seller, Also known as the protection seller. The entity (usually a financial institution, fund or insurer) that is obligated to make certain payments under a credit default swap to its counterparty, the credit protection… … Law dictionary
credit protection buyer — USA credit protection buyer, Also known as the protection buyer. An entity (usually a financial institution or fund) that is entitled to receive certain payments under a credit default swap from its counterparty, the credit protection seller,… … Law dictionary
Credit default swap — If the reference bond performs without default, the protection buyer pays quarterly payments to the seller until maturity … Wikipedia
Credit derivative — In finance, a credit derivative is a securitized derivative whose value is derived from the credit risk on an underlying bond, loan or any other financial asset. In this way, the credit risk is on an entity other than the counterparties to the… … Wikipedia
credit swap — A type of credit derivative instrument. Swap contracts in which one party makes payments only if a specified credit event occurs. In a credit default swap, the protection seller agrees, for an upfront or periodic fee, to compensate the protection … Financial and business terms