A Credit-Linked Note (CLN) is a type of debt instrument that is typically used by institutional investors. The instrument is linked to the creditworthiness of one or more reference entities, which can be companies, sovereign governments, or other types of financial institutions. If the reference entity defaults on its obligations, the holder of the credit-linked note (CLN) will suffer a loss.A credit-linked note (CLN) is a debt instrument that is linked to the performance of a reference asset. The reference asset can be anything from a single loan to a basket of loans or even a broad index. The reference asset's performance determines the interest payments on the credit-linked note (CLN) and, ultimately, whether or not the credit-linked note (CLN) principal is repaid in full. CLNs are issued by banks and other financial institutions and are often used as a way to hedge credit risk.The credit quality of the reference entities affects the interest payments on the credit-linked note (CLN) and, ultimately, the redemption value of the credit-linked note (CLN) at maturity. credit-linked note (CLN) are typically issued by investment banks and sold to institutional investors such as insurance companies and pension funds.