The RISK of loss arising from a potential CREDIT RISK exposure that may appear in the future, such as drawdown on a REVOLVING CREDIT FACILITY or payment under a GUARANTEE or LETTER OF CREDIT . A subcategory of CREDIT RISK . See also CONTINGENT LIABILITY , CORRELATED CREDIT RISK , DIRECT CREDIT RISK , SETTLEMENT RISK , SOVEREIGN RISK , TRADING CREDIT RISK .
Black’s Law Online Dictionary
