unfunded credit derivative
- unfunded credit derivative
-
United Kingdom
A credit derivative in respect of which the seller of the credit protection under the credit derivative makes no upfront payment to cover its potential future liabilities. Under an unfunded credit derivative, the seller will make a payment only if the conditions to settlement are met. Consequently, the buyer takes a credit risk on whether the seller will be able to pay any cash settlement amount or physical settlement amount.
Practical Law Dictionary. Glossary of UK, US and international legal terms.
www.practicallaw.com.
2010.
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