Clause present in a loan agreement that outlines what actions may be taken if a borrower's credit score declines to an unsatisfactory level over the course of the loan. If the borrower's credit score declines to this level, this terms of this clause may require an elevated interest rate or procedural requirements that the creditor may force the borrower to complete, so that the creditor can protect itself.
Related information about rating trigger:
- Rating Trigger - Financial Dictionary - The Free Dictionary
A provision in a loan agreement or bond indenture allowing one party or the other to take a certain action if the borrower's credit rating changes for any reason .
- What is rating trigger? definition and meaning
Definition of rating trigger: Clause present in a loan agreement that outlines what actions may be taken if a borrower's credit score declines to an unsatisfactory ...
- rating trigger - Invest Definition
rating trigger definition: A provision in a loan agreement that initiates a specific action in the event of a change in a firm's credit rating. For example, a downgrade ...
- Rating triggers and overall market risk - New York University School ...
A rating trigger is a peculiar type of covenant - incorporated in bond indentures or in ... Keywords: Rating Trigger, Credit Rating, Credit Risk, Financial Regulation ...
- Should corporate debt include a rating trigger?
A ''rating trigger clause'' in a corporate bond indenture requires a firm to ... What type of a rating trigger clause–prepayment of debt or an increase in the ...
- Rating Trigger: Definition from Answers.com
provision in a loan or indenture agreement that precipitates a specified action in the event of a downgrade of the borrowers credit rating.
- Optimal Design of Rating-Trigger Step-Up Bonds: Agency Conflicts ...
a certain fraction. A sizeable volume of such rating-trigger step-up bonds have ... that Bhanot and Mello (2006) come to the conclusion that rating-trigger step-up ...
- Optimal design of rating-trigger step-up bonds ... - Ideas - RePEc
Downloadable (with restrictions)! Agency conflicts and asymmetric information are two possible explanations that may rationalize the use of a step-up provision ...