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Downside Beta

A measure of beta that reflects a stock's price movement during a downward trend. In this sense, it is a...

Default

A situation in finance where a debtor/ obligor fails to fulfill its obligations under the agreement/ contract/ arrangement, etc. In...

Cross Default

A provision in a debt agreement/ loan (e.g., mortgage or deed of trust, obligation) that stipulates that, in case of...

Defaulter Pays

An arrangement whereby each participant (for example, parties in bilateral trades, or financial market infrastructure (FMI) participants) is required to...

Survivors Pay

A loss-sharing arrangement whereby participants agree that, in the event of a participant’s inability to settle its obligations (e.g., to...

Principal Risk

The risk of losing part or all of the principal of a financial asset. It is the risk that the…

Forward-Starting BDS

A forward contract which obliges the holder to buy or sell a basket default swap (BDS) at a specified time…

Acceleration Covenant

A provision that is usually stipulated in, or attached to, a debt instrument or swap agreement, by virtue of which…

Penalty Clause

A clause in a commutative contract (aqd mu’awadhah) that stipulates that an agreed amount of money shall be paid to…

BCLN

A credit linked note (CLN) in which the underlying is a portfolio or basket subject to credit risk. In other…