Also known as a covered obligation or reference asset, and commonly referred to as the "ref ob."

A debt instrument issued by the reference entity specified in a transaction confirmation for a credit derivatives transactions such as a credit default swap (CDS) upon which credit protection is purchased by the credit protection buyer under the transaction from the credit protection seller under the transaction.

Generally, if a credit event involving the reference entity occurs during the term of the CDS, the credit protection seller pays an agreed amount to the credit protection buyer, usually corresponding to the periodic payments of principal and interest outstanding under the reference obligation.

Note that the occurrence of a credit event under most CDS need not relate specifically to the reference obligation (unless so elected) to trigger payments from the protection seller to the protection buyer under the CDS.