Credit-linked note
= Credit-linked note
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= CLN
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{synonym}
A funded note whose coupons or principal depend on specified credit events of a reference entity or <portfolio>. In a simple structure, the investor supplies principal and receives enhanced coupon for economically selling credit protection; a reference <default> reduces principal repayment. The investor may also face the note issuer's own <credit risk>. This is not automatically the same exposure as directly holding the reference borrower's bond.