Credit derivative


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Related to Credit derivative: Credit default swap

Credit derivative

Financial instruments in which the payoffs depend on the credit risk of companies or government entities, other than the counterparties to the credit derivative transaction itself.

Credit Derivative

Any derivative that allows an investor to hedge its credit risk. For example, if a brokerage is concerned that a client may be unable to pay a margin call, it may transfer this risk to another investor in exchange for paying a fee. Regular derivatives, like forward contracts and options, may be used as credit derivatives, depending on the credit risk of an investor's other positions.
References in periodicals archive ?
In this article, I compare the outcome from a credit derivative contract with that of loan loss provisioning, the more traditional method of managing credit risk.
If there were no bankruptcies, defaults, repudiations, or need for restructuring, credit markets (and credit derivative contracts in particular) would be dull and uninteresting.
The original headline was "Bloomberg Launches Daily China Renminbi Credit Derivatives Price Fixings"
The New York Federal Reserve convened a group of the 14 largest banks in September 2005 to discuss credit derivative market practices.
The book is accompanied by a CD ROM which contains tools for credit derivatives valuation and risk management, illustrating the models used in the book and also providing a valuation toolkit.
com/) the industry changing, inter-dealer broker (IDB) which pioneered the use of a live-screen, Aggressor-Only brokerage platform in the Credit Derivatives (CDS) marketplace, today announced that is has launched two new fixed-income desks brokering Asset-Backed Credit Default Swaps Derivatives (ABX) and Commercial Mortgage-Backed Credit Default Swaps Derivatives (CMBX).
Credit derivatives are financial contracts that allow market participants to assume either a positive or negative exposure to a company's credit to facilitate hedging and speculation.
It describes the development of credit derivatives within the context of both the limitations in the traditional market and the impact of regulation upon that market.
Barclays Capital has a global credit derivative platform that offers the full range of credit derivative products from plain vanilla products to complex structured products, such as collateralized debt obligations.
The non-GAAP financial measures included in this press release are: operating income, present value of financial guaranty and credit derivative gross written premiums ("PVP"), net present value of estimated future installment premiums in force and adjusted book value.
Compared with the lightly regulated and speculative international markets, one of China's problems remains the lack of credit derivative products, said Gao Zhanjun, a senior trader at Beijing-based Citic Securities.
Julius Finance, the leaders in model fusion for the US$58 trillion dollar credit derivatives market, today announced that due to market demand it has launched an independent valuation service for a range of credit derivatives including bespoke synthetic Credit Derivative Obligations (CDOs), CDO2 (CDO squared), CDO3 (CDO cubed), CPPIs, CPDOs, CDPCs and CDSs.