Credit event

A credit event is a specific occurrence that affects the creditworthiness of a borrower, typically leading to a default on a debt obligation. In the context of financial markets, credit events are especially important for credit derivatives, such as credit default swaps (CDS), where they trigger payouts or other actions from the protection seller to the protection buyer. Common examples of credit events include: 1. **Bankruptcy**: The borrower is unable to meet its liabilities and files for bankruptcy protection.