will be extended to a customer. The components of credit terms are: cash discount, credit period, net period. Creditworthiness The condition in which the risk of default on a debtobligation by that entity is deemed low. Credit quality A measure of a bondissuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA, and so forth. The lower the rating, the higher the probability of default. Credit rating An evaluation of an individual's or company's ability to repay obligations or its likelihood of not defaulting See: Creditworthiness. Credit risk The risk that an issuer of debt securities or a borrower may default on its obligations, or that the payment may not be made on a negotiable instrument. Related: Default risk. Credit scoring A statistical technique that combines several financial characteristics to form a single score to represent a customer's creditworthiness. Credit spread Applies to derivative products. Difference in the value of two options, when the value of the one sold exceeds the value of the one bought. One sells a "credit spread." Antithesis of a debit spread Related: Quality spread. Credit union A not-for-profit institution that is operated as a cooperative and offers financial services such as low-interestloans to its members. Credit watch A warning by a bond ratingfirm indicating that a company'scredit rating may change after the current review is concluded. Crediting rate The interest rate offered on an investment type insurance policy. Creditor Lender of money. Creditor's committee A group representing firms that have claims on a company facing bankruptcy or extreme financial difficulty. Creditworthiness Eligibility of an individual or firm to borrowmoney. Creeping expropriation The act of a government squeezing a project by taxes, regulation, access, or changes in law. Creeping tender offer The process by which a group attempting to circumvent certain provisions of the Williams Act gradually acquires shares of a target company in the open market. CREST CREST is CrestCo's real-time settlement system for UK and Irish shares and other corporate securities. CrestCo has provided settlement systems for government bonds and money market instruments in the UK since 1990. Crisp Sets The fuzzy set term for traditional set theory. That is, an object either belongs to a set, or does not. Critical Levels Values of control parameters where the nature of a nonlinear dynamic system changes. The system can bifurcate, or make the transition from stable to turbulent behavior. An example is the straw that breaks the camel's back. Cross Securitiestransaction in which the same broker acts as agent for both sides of the trade; a legal practice only if the broker first offers the securities publicly at a price higher than the bid. Cross-border factoring Concluding a transaction by a network of factors across borders. The exporter's factor can contact correspondent factors in other countries to handle the collection of accounts receivable. Cross-border risk Describes the volatility of returns on international investments caused by events associated with a particular country as opposed to events associated solely with a particular economic or financial agent. Cross-Collateral An agreement