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 ?
The ratings continue to be constrained by concentration risks with a retail-focused portfolio and a majority of revenue derived from Loblaw banners, a cross-default provision in Choice Properties credit facility between CPREIT and Loblaw as well as relatively high leverage as measured by total debt-to-EBITDA for the rating.
OEC's decision to suspend this coupon payment triggers no cross-default clauses.
Under the Forbearance Agreement, the Agent and the Lenders have agreed to forbear from exercising their rights and remedies under the Credit Agreement in respect of certain defaults and alleged defaults thereunder, which include a cross-default as a result of the Company's failure to make an interest payment due on April 2 pursuant to the terms of the indenture governing the Company's 1.0%/8.0% senior secured notes due 2020 and certain financial reporting defaults by the Company under the Credit Agreement.
Etihad could now end up spending hundreds of millions of dollars to keep the bond structure alive, although it is not legally obliged to do so as there is no cross-default provision in the bond documentation, the sources said.
The Sukuk programme does not benefit from a cross-default provision within the guarantee documents, while certain other Fitch-rated Goldman debt issuances benefit from these provisions.
The Malaysian fund also said that the missed interest payment resulted in a cross-default on its 5 billion ringgit ($1.28 billion) sukuk (Islamic bond) due in 2039 and a 2.4 billion ringgit sukuk due between 2021 and 2024.
A failure to repay the ECB debt could trigger cross-default clauses.
"We assess the legal ties between Etihad and Abu Dhabi to be limited as Etihad does not benefit from cross-default provisions and/or guarantees.
A cross guarantee (29) is similar to a cross-default provision.
It said that the protocol will impose a stay on cross-default and early termination rights within standard ISDA derivatives contracts between G-18 firms in the event one of them is subject to resolution action in its jurisdiction.
According to the prospectus of the offering document for the 2005 and 2010 debt exchanges, if Argentina defaults on any debt governed by New York or UK law, then all of the debt under those jurisdictions is considered in default based upon a cross-default provision in the covenants.
KTG qualifies as a material subsidiary in NC KMG's eurobond documentation and is subject to cross-default provisions, but NC KMG does not guarantee KTG's debt.