Business and Personal Finance Dictionary

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• REFERENCE ASSET
  
  A term used in credit swap transactions to identify the underlying instrument. In the most simple structure, cash flow from the reference asset is paid by the asset owner called a protection buyer to a counter-party known as a protection seller. The reference asset is often a marketable, corporate bond rather than a corporate loan from the same obligor because the bonds provide price information than loans which are less homogenous and less marketable. See credit derivative, credit swap.
  
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