deliverable obligation

deliverable obligation
USA
A debt obligation of the reference entity that the credit protection buyer must deliver to the credit protection seller in a physically settled (physical settlement) credit derivatives transaction, in which a credit event has occurred with respect to the reference entity. The deliverable obligation must conform to the criteria specified in the transaction confirmation, which may be general or specific (for example: loans; any payment obligation for borrowed money; listed bonds with a maximum maturity date of less than 30 years; etc.). Upon delivery of the deliverable obligation by the credit protection buyer to the credit protection seller after the occurrence of the credit event, and upon the satisfaction of any other conditions to settlement of the transaction specified in the transaction confirmation, one or more payments become due and owing by the credit protection seller to the credit protection buyer.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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