Default or Credit Risk Clause Samples

Default or Credit Risk. There is a risk that the bond issuer fails to promptly pay the Client the interest or principal if a credit event or default occurs on the bond issuer. A bond’s own credit rating is assigned by credit rating agencies, such as Standard & Poor’s and Moody’s. The higher the rating, the better the Client’s chance of receiving payment for the principal and interest. In addition, the interest payment of such bond product and settlement on the maturity date will be subject to the financial position of the issuer/guarantor. The Client should be aware that if the issuer/guarantor bankrupts or liquidates prior to the maturity date, the Client may lose all the Client’s investment.