The risk that an investment will be worth less at the time it is sold than it was worth when it was bought.
the risk that the seller of a security delivers a security but does not receive payment or that the buyer of a security makes payment but does not receive delivery. In this event, the full principal value of the securities or funds transferred is at risk.
The credit risk that a party will lose the principal value involved in a transaction. In the settlement process, this term is typically associated with exchange-for-value transactions when there is a lag between the final settlement of the various legs of a transaction (i.e. the absence of delivery versus payment). Principal risk that arises from the settlement of foreign exchange transactions is sometimes called cross-currency settlement risk. See credit risk/exposure.
The risk that the borrower will not be able to repay some or all of the principal of an outstanding loan or credit facility.