Cross-default

Cross-default

A provision under which default on one debt obligation triggers default on another debt obligation.

Cross-Default

A provision in a loan agreement or other debt obligation stating that the borrower defaults if he/she goes into default on any other obligation. For example, a cross-default provision may state that a person defaults on his car lease if he defaults on his mortgage. This provision exists to protect the lender.
References in periodicals archive ?
We'll take a look at an operator's other properties with an eye to financing them as a group, because we like to be able to cross-collateralize, cross-default.
The Clear Channel Indenture does not provide any material restrictions related to additional debt, change of control or sale of assets, nor does it contain any cross-default or cross-acceleration provisions.
The ratings reflect the cross- collateralization and cross-default of 53 mortgages securing the bonds, credit enhancement provided to both classes by the $12.
Because the company faces defaults on five bond issues, waiving cross-default provisions in one issue could involve substantial economic loss resulting from possible subordination if other issues are accelerated.
If Mosaic could not satisfy any of the options outlined in the 2008 Senior Notes Refinancing Condition and its lenders would not grant a waiver, Mosaic would be in default under its credit agreement and cross-acceleration and cross-default provisions in certain bond indentures may apply.
Additionally, the majority of NHP's leases contain cross-collateralization and cross-default provisions.
While the notes units' underlying securities are separate, standalone indebtedness of each entity, the senior notes are nondetachable and contain cross-default provisions.
According to the company, this current default on the public indenture does not cross-default with any other funding facility but has cross-acceleration clause on $200 million of debt in the event that there is an acceleration of the public indenture.
Dynegy also announced that it has received the requisite consents from the holders of the debentures to amend the indenture governing the debentures to eliminate the cross-default and cross-acceleration provisions contained in the indenture.
While the notes units' underlying securities are separate, standalone indebtedness of each entity, the perpetual senior notes are nondetachable and contain cross-default provisions.
The notice raises the concern that there may be an acceleration of the $220 million principal amount, that other debt holders may give notice and that, despite obtaining a filing-default waiver through May 31 from the banks, the banks and other debt holder's could also accelerate repayment under cross-default provisions.
All of AES's indentures, other than the indenture governing its junior subordinated convertible notes, contain a cross-default provision, which provides that when an event of default occurs under any other indebtedness of AES in excess of $50 million, as a result of such default, the maturity of such debt is accelerated and such acceleration has not been rescinded or annulled within 60 days.