Credit Event
This Issue in United States
Concept of Credit Event in Futures Trading
In this context of financial law, the following is a definition of Credit Event: An event such as a debt default or bankruptcy that will affect the payoff on a credit derivative, as defined in the derivative agreement.
Credit Event
Concept of Credit Event in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An event linked to the deteriorating credit worthiness of an underlying reference entity in a credit derivative. The occurrence of a credit event usually triggers full or partial termination of the transaction and a payment from protection seller to protection buyer. Credit events include bankruptcy, failure to pay, restructuring, obligation acceleration, obligation default and repudiation/moratorium.
Resources
See Also
- Derivatives Contract
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