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30 Cards in this Set
- Front
- Back
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default risk
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the risk that an obligor does not repay part or his entire financial obligation
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credit deterioration risk
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the risk that credit quality of the debtor decreases
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credit derivatives
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the financial instruments designed to transfer credit risk from one counterpart to another. CD allow an investor to reduce or eliminate credit risk or to assume credit risk, expecting to profit from it
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debtor
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a person, a country or an organization that owes money vs. creditor
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creditor
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noun a person, company, etc. that sb owes money to: The property will be sold to pay off their creditors
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credit risk
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the risk of a financial loss due to a reduction in the credit quality of a debtor
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Credit Default Swap CDS
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The buyer makes a periodic or an upfront payment to the seller of the default swap. The seller promises to make a payment in the event of default of a reference obligation.
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buying protection
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buying a default swap or paying a fixed rate in a default swap
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selling protection/assuming risk
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selling a default swap or paying a floating rate
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default swap premium, fee, price
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default swap spread
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short the default swap basis
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selling the reference obligation and selling protection
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long the default swap basis
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buying the reference obligation and buying protection
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coincidently
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~ (with sth) (formal) happening in the same place or at the same time
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deliberately
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1 done in a way that was planned, not by chance intentionally, on purpose: She’s been deliberately ignoring him all day.
2 slowly and carefully: He packed up his possessions slowly and deliberately. |
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repudiation/moratorium
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1. The act of repudiating or the state of being repudiated.
2. The refusal, especially by public authorities, to acknowledge a contract or debt. |
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moratorium
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~ (on sth) a temporary stopping of an activity, especially by official agreement: The convention called for a two-year moratorium on commercial whaling.
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default swap buyer
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buyer
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default swap seller
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seller
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investor and default swap buyer
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investor and default swap buyer
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default swap seller
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seller
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reference obligation issuer
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issuer
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Bond seller
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seller
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default swap buyer
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buyer
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default swap seller
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seller
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investor and default swap buyer
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investor and default swap buyer
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default swap seller
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seller
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reference obligation issuer
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issuer
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ISDA
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international swaps and derivatives association
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TRORs
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Total Rate of Return Swaps
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credit-spread
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Yield of risky bond - Yield of risk-free bond
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