Nth-To-Default Swap

A credit default swap (CDS) whereby the protection buyer makes a payment to the protection buyer only after the N^th reference entity has been in default, provided that no payment has ever been made for default of the previous entity. The credit default swaps terminates once a payout for the N^th reference entity is made. That is, if the other reference entities, that have not yet defaulted, do default, the protection seller will not have to make any payout