credit default swap

noun

1. finance a contract in which the parties exchange the exposure to loss should a creditor fail to make a payment when it comes due back CDS

Example Sentences

For a small inducement—the exposure of a credit-default swap—they can get a dollar of bad assets off their own books.

From The Daily Beast

See, when a company is about to be taken over, their credit rating falls, and the price of the credit default swap goes up.

From The Daily Beast