In Default

Definition

In Default. The issuer has failed to pay somthing that they are contractually obliged to pay.

Issues and Challenges

(review 7 Oct 09) Does this exist as a term? This is a characteristic of the instrument not the rating. Because it's in default you can expect the rating to drop. Applies to instrument not to debtor. So a company may have 3 bond issues and may be defualt on only one. 14 Oct: Degrees of defaults e.g. tranche not paying interest due to losses on the underlying portrfolio; tranches being used to pay down more senior tranches.

Disclaimer

This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.