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.