Featured Pathways

More pathways

Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

More pathways

Book a demo

Ready to get started?

Our Platform

Expert led content

+1,000 expert presented, on-demand video modules

Learning analytics

Keep track of learning progress with our comprehensive data

Interactive learning

Engage with our video hotspots and knowledge check-ins

Testing & certification

Gain CPD / CPE credits and professional certification

Managed learning

Build, scale and manage your organisation’s learning

Integrations

Connect Finance Unlocked to your current platform

Featured Content

More featured content

Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

More featured content

Book a demo

Ready to get started?

Featured Pathways

More pathways

Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

More pathways

Book a demo

Ready to get started?

Our Platform

Expert led content

+1,000 expert presented, on-demand video modules

Learning analytics

Keep track of learning progress with our comprehensive data

Interactive learning

Engage with our video hotspots and knowledge check-ins

Testing & certification

Gain CPD / CPE credits and professional certification

Managed learning

Build, scale and manage your organisation’s learning

Integrations

Connect Finance Unlocked to your current platform

Featured Content

More featured content

Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

More featured content

Book a demo

Ready to get started?

Book a demo

Ready to get started?

What is Cross-default?

What is Cross-default?

Tim Skeet

35 years: Debt capital markets

Cross-default is a common clause in borrowing documentation that allows creditors to demand repayment if it defaults on one of its obligations. Join Tim in this video where he takes us through this concept in more detail.

Cross-default is a common clause in borrowing documentation that allows creditors to demand repayment if it defaults on one of its obligations. Join Tim in this video where he takes us through this concept in more detail.

Subscribe to watch

Access this and all of the content on our platform by signing up for a 7-day free trial.

What is Cross-default?

3 mins 16 secs

Key learning objectives:

  • Define cross-default

  • Explain the purpose of a cross-default clause

  • Explain when a company can be declared to be in technical default

Overview:

A cross-default clause in a borrowing document ensures that all creditors are allowed to demand repayment if the borrower formally defaults on one of its borrowings.

Subscribe to watch

Access this and all of the content on our platform by signing up for a 7-day free trial.

Summary

What is cross-default?

A cross-default clause is a standard clause in borrowing documents. It ensures that if a borrower formally defaults on a specific borrowing, all other borrowings with cross-default language are automatically declared in default as well. Cross-default is ubiquitous in loan documentation; proportionally less so but still very common in bond documentation.

What is the purpose of cross-default?

Cross-default ensures that creditors are not unduly singled out for default when other creditors are excluded from default. It also prevents borrowers from offering priority treatment to specific lenders or investors to the detriment of others.

When is a company declared to be in default?

A company can be declared in technical default if it breaches the terms of any of its negative or positive covenants. Many covenants are expressed in the form of ratios. For example, if a company’s interest bill exceeds a certain multiple of its earnings, it might be in breach of covenants, in which case default may be declared and cross-default invoked.

Default does not just happen in the extreme scenario of a company not having the money to pay its interest or repay its principal. In many cases, failure to pay principal or interest within 30 days of a relevant due date might constitute an event of default and give lenders and bondholders the right to demand immediate repayment.

Subscribe to watch

Access this and all of the content on our platform by signing up for a 7-day free trial.

Tim Skeet

Tim Skeet

Banker with more than 35 years experience in the financial markets. Tim has been an ICMA board member and an ECBC steering committee member. Tim is a Freeman of the City of London.

There are no available Videos from "Tim Skeet"