Issuer Risk
Definition
What is Issuer Risk?
The risk that the entity issuing a securityA tradable financial claim or ownership interest, such as a share, bond, or fund unit. cannot meet its obligations.
Example in practice
How This Looks in Practice
A principal-protected noteA structured debt instrument designed to return some or all principal at maturity, subject to issuer credit and terms. still loses value if the issuing bank defaults.
Keep learning
Related Terms
Market Risk
The possibility of loss because broad market prices or rates move against an investment.
Risk TermsCredit Risk
The possibility that a borrower or issuer will fail to make promised payments or suffer a downgrade.
Risk TermsInterest-Rate Risk
The possibility that changing market interest rates will reduce an investment's value or income appeal.
MiscellaneousBusiness Day
A day on which relevant financial institutions and markets are open for normal processing.