FIRST-TO-DEFAULT SWAP
\fˈɜːsttuːdɪfˈɒlt swˈɒp], \fˈɜːsttuːdɪfˈɒlt swˈɒp], \f_ˈɜː_s_t_t_uː_d_ɪ_f_ˈɒ_l_t s_w_ˈɒ_p]\
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An OVER THE COUNTER DEFAULT SWAP comprised of a BASKET of reference credits that entitles the purchaser to a payout on the first one that DEFAULTS; once a default occurs, the transaction terminates. Since swap pricing generally takes account of reference credit CORRELATIONS, the DERIVATIVE is cheaper than the purchase of individual contracts on the same reference credits. See also CREDIT DERIVATIVE.
By Henry Campbell Black
Word of the day
Dopamine Acetyltransferase
- An enzyme that catalyzes the of groups from acetyl-CoA to arylamines. They have wide specificity for aromatic amines, particularly serotonin, and can also catalyze acetyl transfer between arylamines without CoA. EC 2.3.1.5.
Nearby Words
- first-party insurance
- first-place finish
- first-rate
- first-rater
- first-string
- FIRST-TO-DEFAULT SWAP
- first-year
- firstborn
- firstclass
- firsthand
- firstling