Loan Credit Default Swap [LCDS] Law and Legal Definition
Loan Credit Default Swap or LCDS is a type of credit derivative in which the credit exposure of an underlying loan is swapped between two parties. This is conceptually very similar to a standard Credit Default Swap, the only difference being the underlying reference entity is limited strictly to syndicated secured loans, rather than any loan or bond. These derivatives can be used to hedge against credit exposure the buyer may have or to obtain credit exposure for the seller. Loan Credit Default Swap is also known as loan-only credit default swap.
