Reference Entity

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Dictionary Says

Definition of 'Reference Entity'

One of the underlying parties involved in a credit derivative contract. The reference entity bears the credit risk of the contract, and can be a corporation, government or other legal entity that issues debt of any kind. If a credit event such as a default occurs and the reference entity is unable to satisfy the conditions of the bond, the buyer of the credit default swaps receives payment from the seller.
Investopedia Says

Investopedia explains 'Reference Entity'

The reference entity is essentially the party upon which the two counterparties in the transaction are speculating. The seller of the transaction is selling protection against the default of the reference entity. The buyer of the securitized credit derivative believes that there may be a chance that the reference entity will default upon their issued debt and is therefore entering the appropriate position.

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'Reference Entity'

  • Credit Default Swaps: An Introduction

    http://www.investopedia.com/articles/optioninvestor/08/cds.asp
    ... As mentioned above, the buyer of a CDS will gain protection or earn a profit, depending
    on the purpose of the transaction, when the reference entity (the issuer ...

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

    http://www.investopedia.com/articles/bonds/09/what-happens-to-single-name-cds.asp
    ... A single-name CDS is a derivative in which the underlying instrument is a reference
    obligation, or a bond of a particular issuer or reference entity. ...

  • The Alphabet Soup Of Credit Derivative Indexes

    http://www.investopedia.com/articles/optioninvestor/07/credit-der-index.asp
    ... To Swaps.) As the name implies, in a single name CDS the underlying asset or reference
    obligation is a bond of one particular issuer or reference entity. ...

  • EVA: Overview | Investopedia

    http://www.investopedia.com/university/EVA/EVA1.asp
    ... metric is consistency: each half of the pair should reference the same ... market
    capitalization (also known as the "enterprise value" or "entity value"), divided ...

  • Detecting Financial Statement Fraud

    http://www.investopedia.com/articles/financial-theory/11/detecting-financial-fraud.asp
    ... in some unauthorized benefit to the individual or to the entity or some ... rather than
    having an account serve as the point of reference, financial information is ...

  • An Overview Of The Pension Benefit Guaranty Corporation (PBGC)

    http://www.investopedia.com/articles/retirement/06/pbgc.asp
    ... a PBGC mandated takeover is the method by which the entity becomes responsible for ...
    plan, your plan's "Summary Plan Description" will include a reference to the ...

  • So, You Want To Take Your Broker To Court

    http://www.investopedia.com/articles/stocks/08/filing-claims-for-investment-losses.asp
    ... has designed its process to be handled by a non-legal entity, most people ... Luckily,
    class-action filing papers provide a clear reference to this issue and offer ...

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