Credit Enhancement

Credit enhancement refers to strategies or tools used to improve the creditworthiness of a borrower or debt issuance, making it more attractive to lenders or investors. It reduces the risk of default, often through collateral, guarantees, or reserve funds, thereby lowering interest rates and enabling easier access to funding. Essentially, it provides additional security or assurances that the borrower can meet their payment obligations, helping to enhance confidence among investors and improve the terms of financing.