BizTerm Definition
Full Definition

A general term meaning that the purchaser of a financial asset from an original creditor has a claim on the original creditor in case the debtor defaults. Specific arrangements to provide recourse arise in a variety of innovative transactions, including LDC loan swaps and various types of securitized assets. Such arrangements can take many forms, including: An explicit guarantee that credit losses will be reimbursed or the assets replaced by assets of similar quality; an agreement to repurchase assets before maturity; or more indirectly, indemnification by a third-party guarantor for any losses that occur.

Previous Biz Term Next Biz Term