Credit Event

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Dictionary Says

Definition of 'Credit Event'

Any sudden and tangible (negative) change in a borrower's credit standing or decline in credit rating. A credit event brings into question the borrower's ability to repay its debt. It is the defining trigger in a credit derivative contract, or credit default swap. If the borrower experiences a credit event, then the buyer of the contract must pay the seller an agreed-upon sum to cover the loss.
Investopedia Says

Investopedia explains 'Credit Event'

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.

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Search results for

'Credit Event'

  • Credit Default Swaps: What Happens In A Credit Event?

    http://www.investopedia.com/articles/bonds/09/what-happens-to-single-name-cds.asp
    Credit Default Swaps: What Happens In A Credit Event? ... This article will explore what
    happens to CDS holders when a company experiences a credit event. ...

  • Credit Default Swaps: An Introduction

    http://www.investopedia.com/articles/optioninvestor/08/cds.asp
    ... the contract, who often owns the underlying credit, with protection against default,
    a credit rating downgrade, or another negative "credit event." The seller ...

  • The Alphabet Soup Of Credit Derivative Indexes

    http://www.investopedia.com/articles/optioninvestor/07/credit-der-index.asp
    ... If the reference entity of a credit default swap experiences what is known as a
    credit event (such as a bankruptcy, downgrade, etc.), then the buyer of ...

  • Understanding Interest Rates, Inflation And The Bond Market

    http://www.investopedia.com/articles/bonds/09/bond-market-interest-rates.asp
    ... The probability of a negative credit event or default affects a bond's price – the
    higher the risk of a negative credit event occurring, the higher the ...

  • The Risks Of Sovereign Bonds

    http://www.investopedia.com/articles/bonds/the-risks-of-sovereign-bonds.asp
    ... Because it is not technically a default or other credit event, issuers that
    can't (or won't) pay back their scheduled debts sometimes prefer to inflate their ...

  • Get Positive Results With Negative Basis Trades

    http://www.investopedia.com/articles/trading/08/negative-basis-trades.asp
    ... buying protection means you have the right to sell the bond at par value to the
    seller of protection in the event of default or another negative credit event. ...

  • 3 Key Markets To Follow When Trading FX

    http://www.investopedia.com/articles/forex/11/3-markets-follow-trading-fx.asp
    ... Introduced and widely used in the last 14 years, credit default swaps are contracts
    protecting a buyer's position against a potential credit event. ...

  • Corporate Bonds: An Introduction To Credit Risk

    http://www.investopedia.com/articles/03/110503.asp
    ... example, if the telecom industry happens to be consolidating, then event risk may ...
    Credit Spread: The Payoff For Assuming Credit Risk The payoff for assuming ...

  • Event-Linked Bonds: Competing Against A Catastrophe

    http://www.investopedia.com/articles/bonds/08/event-linked-bonds.asp
    ... either from the issuer or the credit agency, make sure to read those as well. Check
    to see if the assumptions being made about event probabilities are ...

  • What is the best way to budget for holiday and special event ...

    http://www.investopedia.com/ask/answers/07/holiday-spending.asp
    ... December 31 2008 | Filed Under » Banking, Budgeting, Credit Cards. ... What is the
    best way to budget for holiday and special event spending? ...

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