A credit event is the financial term used to describe either:

A general default event related to a legal entity's previously agreed financial obligation. In this case, a legal entity fails to meet its obligation on any significant financial transaction (coupon on a bond it issued or interest rate payment on a swap for example). The marketplace will recognize this as an event related to the legal entity's credit worthiness. OR

A financial event related to a legal entity which triggers specific protection provided by a credit derivative (credit default swap, credit default swap index, credit default swap index tranche, etc.)

The events triggering a credit derivative are defined in a bilateral swap confirmation which is a transactional document that typically refers to an ISDA master agreement previously executed between the two swap counterparties. There are several standard credit events which are typically referred to in credit derivative transactions:

• Bankruptcy
• Failure to Pay
• Restructuring
• Repudiation
• Moratorium
• Obligation Acceleration
• Obligation Default

This economics or finance-related article is a stub. You can help Wikipedia by expanding it. v • d • e