A credit derivative that consists of components or has features not directly relating to the core or basic contract. Examples of hybrid credit derivatives include credit contingent swaps, capital default swaps, etc.
In the case of a credit contingent swap, the buyer (holder) has the right to sell a contractual obligation (bond, loan) for its face value, contingent on a pre-specified credit event and a trigger. In other words, in addition to the occurrence of a credit event, contingency requires an additional trigger, typically the occurrence of a credit event associated with another reference entity or a material change in asset prices (equity prices, commodity prices, or interest rates).
