Definition and Citations:
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.