It means that the statement is not the case if either of the bank's clients defaults and does not honour their agreement with the bank.
Dont understand the "statement". It means that the bank does / or doesnt not provide cover to for example company A in case company B defaults ? or is sth else? thanks
The statement refers to the part in the core reading prior to the bit you have quoted in the question where it talks about the banks swap agreement. Company A and company B in your example above would be treated as separate customers and the default of one would not affect the security to the other. They are independent.
