A combination of an interest-bearing debt security or instrument and a credit default swap. The face value or principal amount payable at maturity is linked to a specific credit event. That is, the principal may be reduced upon the occurrence of a given credit event(s) relating to an underlying issuer (obligor) or reference debt instrument. The holder of the hybrid instrument is the seller of protection, whilst the issuer is the buyer.

Key examples of credit-link hybrids include: credit-linked notes and credit-linked deposits.