A credit derivative whose underlying is a set of names, i.e., reference entities/ assets/ issuers. Typically, every credit derivative contract has two counterparties: a protection buyer and a protection seller (also known as the buyer and seller of the credit risk). A multi-name contract is associated with multiple credit events which trigger, if occur, remedial payment to the protection buyer. Otherwise, the contract will remain active until it reaches maturity date after which it expires. This type of a credit derivative allows investors to transfer default risk to the credit market. An investor can buy or sell default insurance on a portfolio of credit-sensitive instruments. Issuers of such instruments (bonds, loans, etc) are exposed to correlated economic risk factors such as interest rates or commodity prices.

The payment structure of multi-name credit derivatives depends on a number of defaults rather than one. Multi-name credit derivatives run the gamut from simple structures (forward contracts) to more complex ones (options, swaps, swaptions, etc). Examples include: multi-name credit default forwards, multi-name credit default swaps, multi-name credit default swaptions, and multi-name credit default options. Furthermore, the collateralized debt obligation (CDO) is one of the most popular multi-name credit derivatives.