Cross-Default
Short definition
Cross-default makes a default on another debt a default on this pack. It turns one miss into a group wall; a threshold can carve out small debts.
Detailed explanation
Scope: which group entities, which debt types, which de minimis amount. Guarantees and leases count as “debt” in some packs.
It differs from cross-acceleration, which waits until the other debt is actually accelerated; cross-default treats the miss itself as enough.
Why it matters for the CFO
A small supplier facility or a guarantee turning to cash can lock a large RCF.
How to read it
The lower the threshold, the easier the contagion. Threshold 0 means every miss is systemic.
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Definitions are educational. They are not investment, credit or tax advice.