Credit event
A fact defined by documentation that triggers consequences: a missed payment, a restructuring, bankruptcy, a covenant breach.
How to read the number
The term exists so that the parties share one definition of trouble: holders' rights and payouts on credit derivatives are counted from it.
When the metric lies
The list of events is a matter of contract, not of common sense. A situation the holder regards as a default may fall outside the definition and grant no rights at all.
Also known as: event of default