Cross-default clause also known as third-party default clause

The bank is entitled to terminate the loan – namely, to repay the loan (the act of paying back money borrowed earlier from the bank) – if the debtor defaults on an obligation to another creditor, including the tax authorities. – See covenant, default, downgrade trigger clause, third party due clause, first instalment default clause, rollover risk, forfeiture clause, prepayment clause, cross.

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