Finance Deals & Syndicated Lending · glossary

Cross-default / cross-acceleration

Cross-default makes trouble under the borrower's other debt an Event of Default under this loan. The full version bites when another lender could accelerate. Sunrise takes the milder cross-acceleration route: €2m or more of other debt actually unpaid or actually called in. Clause 19.4 · Chapter 10

Explained in Chapter 10, Events of Default, of Finance Deals & Syndicated Lending.

How it comes up, in Chapter 10
The market argues about one point on every deal. A full cross-default clause is triggered when another lender becomes entitled to accelerate, even if it never does. A cross-acceleration clause is triggered only when that lender actually accelerates.
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Where this term lives

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