An event or circumstance specified in a transaction confirmation for a credit derivatives transaction, such as a credit default swap (CDS), the occurrence of which with respect to the reference entity specified in the transaction confirmation obligates the credit protection seller, subject to certain conditions, to make periodic credit protection payments to the credit protection buyer under the CDS.

The credit events most commonly specified in CDS transactions are failure of the reference entity to make a payment under a debt obligation (failure to pay) and bankruptcy of, including the occurrence of certain insolvency-related events relating to, the reference entity. Note that whether a credit even has occurred with respect to a particular reference entity is determined by an ISDA "determinations committee" or DC, comprised of both buy-side and dealer-side regional market participants (see Practice Note, Credit Derivatives: Overview (US): Box, ISDA's Big Bang: CDS Determinations Committees).