Okuzeka
Finance & Banking vocabulary · Loans & Credit

Cross-default

Meaning in finance & banking, with examples

nounAdvanced term

In finance & banking, cross-default means: A clause linking default under one debt agreement to default under another agreement.

In Turkish: çapraz temerrüt

How it is used

Use for the contractual link; thresholds, exclusions and triggering events depend on the document.

Example sentences

  1. The missed bond payment triggered the loan's cross-default clause.

    A failure on one obligation affects another financing agreement.

  2. The lawyers negotiated a higher threshold for cross-default.

    The threshold limits which outside defaults activate the clause.

Common collocations

  • cross-default provision
  • cross-default threshold
  • defaultFailure to make loan or bond payments as agreed. A borrower is usually treated as in default after missing payments for a set period, often 90 days.
  • covenantA promise in a loan or bond agreement that the borrower will or will not do certain things, such as keeping its debt below a set level.

More terms: Loans & Credit

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This page explains English vocabulary for learners. It is not financial advice.