Cross Default

A provisions in a bond indenture or loan agreement that puts the borrower in default if the borrower defaults on another obligation.

Also known as "cross acceleration".

This provides more security to the lender. You can think of this as an "out-clause" to the contract.


Investment dictionary. . 2012.

Look at other dictionaries:

  • cross-default — A clause which operates by automatically defaulting a party under Agreement A where it has defaulted under Agreement B. A cross default provision effectively gives the non defaulting party under Agreement A the benefit of the default provisions… …   Law dictionary

  • Cross default — A provision under which default on one debt obligation triggers default on another debt obligation. The New York Times Financial Glossary …   Financial and business terms

  • cross default — Provision in the loan documents in which the debtor agrees that default on one loan will also constitute default on other obligations to the creditor. American Banker Glossary …   Financial and business terms

  • cross-default — A provision under which default on one debt obligation triggers default on another debt obligation. Bloomberg Financial Dictionary …   Financial and business terms

  • Cross Default Clauses —    Cross default clauses are triggered automatically when a lender declares that a loan is in default. Such clauses might mean that other loans and borrowing instruments made to the borrower by the lender and by other lenders are also in default …   Financial and business terms

  • Cross-Default-Klausel — Die Cross Default Klausel ist eine Vereinbarung in internationalen Kreditverträgen oder Anleihebedingungen, wonach eine Vertragsstörung bereits eintreten soll, wenn der Kreditnehmer im Verhältnis zu anderen Gläubigern vertragsbrüchig wird, ohne… …   Deutsch Wikipedia

  • cross-default clause — The most onerous clause in a loan agreement, stating that if the borrower defaults on one loan, any other loans may become repayable. The cross default clause is activated when another lender is in a position to call a default on its loan or an… …   Accounting dictionary

  • Cross-Default-Klausel — bes. im internationalen Finanzierungsgeschäft vereinbarte Kündigungsmöglichkeit von Kreditverhältnissen bei Verzug oder anderen Vertragsverletzungen des Schuldners. Vgl. auch ⇡ Default Klausel …   Lexikon der Economics

  • cross-acceleration — USA A clause which operates by defaulting a borrower under Agreement A when it defaulted under Agreement B and the lender under Agreement B accelerates repayment. A cross acceleration provision effectively gives the lender under Agreement A the… …   Law dictionary

  • Default-Klausel — Die Default Klausel (engl. default = „Leistungsstörung, Verzug“) ist eine Vereinbarung in internationalen Anleihebedingungen oder in Kreditverträgen, wonach der Gläubiger das Recht eingeräumt bekommt, den Anleihe oder Kreditbetrag sofort fällig… …   Deutsch Wikipedia

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