In one sentence
A provision making a default under one loan an automatic default under another, linking otherwise separate obligations.
The longer version
Cross-default clauses let a lender treat trouble on one loan as trouble on all related loans, protecting against a borrower selectively defaulting. They are common where one sponsor has multiple facilities with the same lender.
For diligence, cross-default and cross-collateralization terms change the risk picture, because they entangle loans that look independent on their face.
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