Definition of credit derivative in English:

credit derivative

Line breaks: credit de¦riva|tive


A type of derivative in which the risk that a loan will not be repaid is sold to a party other than the lender: credit derivatives act as insurance for a company that invests in a corporate bond or loan
More example sentences
  • Credit derivatives are a major accident in the making.
  • Other application areas are credit derivatives where the payoff is linked to the spread.
  • Banks have also pulled in profits in side businesses such as credit derivatives and settling trades for hedge funds.

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Word of the day deictic
Pronunciation: ˈdīktik
denoting a word whose meaning depends on context...